Don't Ignore This Chart!

AMC Might Entertain The Bulls This Week

Tom Bowley

Tom Bowley

Chief Market Strategist, EarningsBeats.com

I'm mostly a short-term momentum trader that likes to follow the big picture trend.  But it's hard to ignore stocks after they've been bludgeoned for a potential quick bounce, especially when you see a reversing candle on heavy volume.  Enter AMC Entertainment Holdings (AMC).  Here's a stock that's lost more than half its market capitalization in the past few months and it's had an absolutely abysmal August.  But Friday should provide the bulls a little short-term hope.  Check out the chart:

Those green arrows show that the declining 20 day EMA has been a significant resistance level and it likely will continue to be.  Also, the latest breakdown occurred near the 15 level.  While I do not - in any way, shape or form - suggest this is a healthy chart, I do believe AMC could be primed for a near-term bounce.  A trip back to 15 is all I would look for with perhaps an intraday move to test that 20 day EMA.  If you decide to take a chance on the long side, keep a stop in place.  A trip below Friday's 12.05 low would negate the hammer and its reversing tendencies.

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market. Learn More