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
