This Reddit Stock Looks Ready To Break Out Soon
AMC Entertainment Holdings Inc. (NYSE:AMC) started trending Thursday, most likely after the stock gapped higher.
AMC is one of the stocks at the center of the investing movement driven by the Reddit page WallStreetBets along with other popular stocks such as Gamestop Corp. (NYSE:GME), Clover Health Investment Corp. (NASDAQ:CLOV) and MicroVision Inc. (NASDAQ:MVIS).
AMC was up 6.7% at $10.44 at last check.
Below is a technical analysis of the AMC stock chart.
AMC Daily Chart Analysis
- The stock is trading above both the 50-day moving average (green) as well as the 200-day moving average (blue). This indicates the stock has had bullish sentiment throughout the recent months.
- The moving averages are areas on the chart that may hold a support level unless the price makes a strong move downwards past them.
Key AMC Stock Levels To Watch
- The stock looks to be nearing the end of a pattern. Connecting the highs and lows shows the price is getting condensed in what technical traders may call a pennant pattern.
- The pennant pattern forms as the price is condensed between narrowing highs and lows. A strong move in either direction typically follows, and the stock continues trending in the same direction as the breakout.
See also: What are Reddit Stocks?
Bullish technical traders would like to see the stock breakout of the pennant pattern and start moving upwards. To confirm the breakout of the pennant pattern, traders would like to see the stock cross above the line connecting the highs with some consolidation.
Bearish technical traders would like to see the stock break out of the pattern to the downside. A cross below the line connected by the lows may bring about a large drop-off.
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