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What Happened To AMC Entertainment's Stock And When Will It Recover? A Technical Analysis

December 1, 2021 5:31 pm
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What Happened To AMC Entertainment's Stock And When Will It Recover? A Technical Analysis

AMC Entertainment Holdings Inc. (NYSE:AMC) shares are trading lower Wednesday, as concerns over COVID-19 variant omicron weighs on the outlook for theater traffic in the future. Shutdowns in theaters in the beginning of 2020 could continue if the omicron variant extends the pandemic.

AMC Entertainment closed down 15.8% at $28.57.

See Also: You Ask, We Analyze: Why AMC Entertainment Stock Could Turn Heads On A Break From This Pattern

AMC Entertainment Daily Chart Analysis

  • The stock has fallen below support in what technical traders call a pennant pattern.
  • The stock was seeing condensed highs and lows and neared the end of the pennant pattern looking for a breakout, but fell below pattern support seeing a strong bearish move.
  • The stock trades below the 50-day moving average (green) and fell below the 200-day moving average (blue) Wednesday, indicating the sentiment in the stock looks to be turning more bearish.
  • Each of these moving averages may hold as an area of resistance in the future.
  • The Relative Strength Index (RSI) saw a steep drop off and pushed down to 25 on the level Wednesday. This shows the stock is now in the oversold range and is seeing much more selling pressure than buying pressure.

amcdaily12-1-21.png

What’s Next For AMC Entertainment?

Bullish traders want AMC to bounce and start to head higher while being able to form higher lows. Higher lows are key in showing the stock is ready to turnaround and start to move higher once again. Bulls also want to see the price cross back above the moving averages for the sentiment to turn bullish once again.

Bearish traders look to have taken control of the stock after the drop below the pattern support and the moving averages. The drop below the moving averages shows a bearish sentiment beginning in the stock. If the stock can hold below the pattern support and the moving averages, bears can maintain a hold on the stock.

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