Where to watch for a bounce as AMC goes lower.In its downtrend, AMC printed the most recent lower high at the $18.92 level on April 19 and the most recent confirmed lower low was formed on April 13 at $16.94. On Friday, AMC was trading down toward what will eventually be the next lower low in the pattern and bullish traders looking to enter for a bounce back up can watch for a reversal candlestick to eventually form.
If AMC closes the trading day near its low-of-day price, it will print a shooting star candlestick, which could indicate lower prices will come again on Monday. If the stock is able to find buyers and close the trading day flat or near the high-of-day, the stock will print a doji candlestick or hammer candlestick, respectively, which could indicate a bounce to the upside is on the horizon.
The bounce is likely to come soon because AMC’s relative strength index (RSI) is measuring in at about the 40% level. When a stock’s RSI nears or reaches the 30% level it becomes oversold, which can be a buy signal for technical traders.
The move lower on Friday was on lower-than-average volume, which indicates the stock may be running out of sellers, which also points toward an imminent bounce. At press time, only about 19 million shares of AMC had exchanged hands compared to the 10-day average of 34.34 million.
AMC has resistance above at $17.07 and $20.36 and support below at $14.96 and $12.22.
