The AMC Setup
Updated
AMC stock has not been a generator for portfolio growth. With the rise of online streaming for movies (Ahem, Netflix), it has been hard to compete. I studied film for my undergraduate degree - I love movies, but I don't love this stock. That said, it has at least held above the broken downtrend on the current retrace. I have also heard they have enough backing to survive for a while longer. If they can thrive and adapt in the wake of the pandemic, perhaps they can grow. As I've mentioned, I think there will a rush of people wanting to experience things like going to bars and going out to movies again, creating a kind of "roaring 20's" moment. That's barring further economic disaster/uncertainty. This is a bit different from GameStop, since at least video games can be enjoyed from home.
On this chart, there are clear support and resistance levels. This zone seems like an okay place to buy, but if it drops substantially below $5.50 and does not bounce, it would be back in the downtrend. From there, it can go straight back to $2 or lower (towards the broadening wedge support - light blue). That's the risk. So if you have a limit to how much you can lose (as with any trade), so if I were trading this, I would set a stop loss. The risk/reward seems pretty evenly split here, so not necessarily an amazing bet at these levels. However, If it breaks above the $20 level, I can see it heading towards its previous major resistance level, around $36. If it breaks above there, it can make a new ATH and squeeze shorts towards $100. Price for AMC has been quite suppressed, even prior to 2020. I have a slight bias to the upside here, simply because it hasn't moved up dramatically yet, and there still seems to be some energy left in the market for more wild price movements to the upside. We're in a retail frenzy.
We'll see what happens! This stock isn't really on my radar right now, but I posted this by request. This is not financial advice - this is for speculation, education, and entertainment only.
-Victor Cobra
On this chart, there are clear support and resistance levels. This zone seems like an okay place to buy, but if it drops substantially below $5.50 and does not bounce, it would be back in the downtrend. From there, it can go straight back to $2 or lower (towards the broadening wedge support - light blue). That's the risk. So if you have a limit to how much you can lose (as with any trade), so if I were trading this, I would set a stop loss. The risk/reward seems pretty evenly split here, so not necessarily an amazing bet at these levels. However, If it breaks above the $20 level, I can see it heading towards its previous major resistance level, around $36. If it breaks above there, it can make a new ATH and squeeze shorts towards $100. Price for AMC has been quite suppressed, even prior to 2020. I have a slight bias to the upside here, simply because it hasn't moved up dramatically yet, and there still seems to be some energy left in the market for more wild price movements to the upside. We're in a retail frenzy.
We'll see what happens! This stock isn't really on my radar right now, but I posted this by request. This is not financial advice - this is for speculation, education, and entertainment only.
-Victor Cobra
Note
Again, it's essentially a gamble with this one. Risk -80% to $2, or gain 400-1000%? Some would love to take this bet, but one can minimize risk by setting a stop loss. For example, if I wanted to bet $1000 but I can only afford to lose $500, I would place a stop loss at 50% of the current price, which would be below $5.Note
AMC will need to close the week above the downtrend to avoid looking bearish. For now, this can be considered chop. A drop below $8 could cause more panic selling in the short term.Note
A close above the 100w MA would also be a decently strong signal. Let's see what happens for the rest of today and tomorrow! Note
Looks pretty weak at daily close. I think a lot will depend on what happens tomorrow. If it cannot bounce, I think the bullish case becomes weaker.Note
AMC is back below the downtrend, clearly. If it can't get back above or close the week much higher, I think the potential long setup is invalidated.Note
Wowzah, so this thing is actually trying to break the downtrend again! Pretty amazing price action. If it can hold this breakout, AMC can finally hit some higher prices. Needs to hold above that light blue downtrend. Note
Just as with Gamestop, as long as it continues to make higher lows, we can see a long term trend reversal play out.
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