AMC Entertainment AMC) – Request report continues to follow the Reddit hype, especially with stocks like GameStop GME) – Request report still driving high.
However, earnings could throw a curveball into the mix when AMC reports after trading close on Wednesday.
On Monday, Wedbush analysts doubled their target price for the stock to $ 5. However, that would be more than a 50% downside from current levels.
While stocks have outperformed session highs, the AMC stock was still up about 11% as of the day of writing. Shares have been all over the chart lately, but are currently up about 45% in the last three trading sessions.
The move, of course, comes after a 75% drop from its January high as stocks look to recoup some of those losses.
It’s a very mixed bag with AMC as the company continues to struggle but the country keeps reopening. The reopening in combination with the WallStreetBets hype has made for a fleeting ride.
Let’s take a look at some important levels on the map.
Trading AMC
Daily chart of AMC stocks.
Chart courtesy of TrendSpider.com
In the chart above, you can see that this four-day run-up came before the revenues from a retest of the $ 7.50 area.
This zone was significant for the past year, with most serving as resistance until January 2021, when AMC shot through this level towards $ 20.
After a few days of extreme volatility – where the stock went from ~ $ 20 to $ 7 and back to $ 17 – AMC finally settled in the $ 5.50 to $ 6 range before falling back to $ 7.50 and enjoying of the rally we see today.
Right now, earnings are hovering on the 200-week moving average and earnings are likely to be a determining factor in how the stock trades in the short term.
On the upside, I want to see if the stock can knock off Wednesday’s high and fill the gap close to $ 13. If it can, there’s nothing technically stopping the stock from retesting the 61.8% retracement at $ 14.59.
Above that, $ 16 comes into play. An extreme push could end up with $ 20 on the table, but with AMC wisely raising capital at its earlier price spike, the additional supply of stocks makes a robust rally difficult to bet on.
On the other hand, it is quite easy. Taurus want to see the 10-day moving average, but need to see $ 7.50 as support. Below, the February low puts $ 5.26 in play, followed by the 200-day moving average just below $ 5.