Don't Ignore This Chart!

AMC Might Entertain The Bulls This Week

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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 at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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