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

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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