A massive AMC breakout could be underway as technical analysis shows a ‘bullish wedge’ pattern forming.
The pattern may also be referred to as a ‘descending broadening wedge’ which I’ll explain in more detail down below.
Today I’ll be going over some technical analysis for AMC and walk you through the levels to keep an eye out for.
By the end of this article, you will know my analysis on approximately how low AMC may go before a bounce and breakout.
And also, proof and indication massive price action is inevitable in the coming weeks.
This is exciting.
Let’s get started!
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Breaking down AMC’s levels
AMC has been setting itself up for an incredibly bullish run over the past 20 months ever since retail investors first began purchasing the stock in January of 2021.
The battle between buyers and sellers has created what’s known as a ‘descending broadening wedge’ over the long run.
This means retail investors never truly left despite what mainstream media has attempted to portray.
But when looking at the technical analysis of the pattern, we can see a massive rebound could be underway.
Retail investors will have confirmation once price hits a major level of support followed by bullish price action, indicating the start of a reversal.
How low will AMC go before a reversal?
AMC has a very strong level of support around the high $8 to low $9 range but we may even see the stock price drop as low as $6.50.
The next major retest price level is around $19.70 where we will meet a big resistance zone at $28.30, respectively.
If AMC is able to break this level, the movie theatre chain stock will retest $35.20.
Breaking $40 is the key to greater momentum beyond previous share prices.
If you’re not familiar with Trey from Trey’s Trades, he posted AMC’s technical analysis chart pattern and compared it to this descending broadening wedge pattern.
These indications tend to be extremely bullish and break upwards most of the time.
It’s very possible we see AMC breakout in the coming weeks or months.
It’s important to note that technical analysis only allows traders to identify the possible movement of a particular security.
AMC stock hit a low of $8.85 during pre-market hours on Monday and began to trend upwards during the trading day.
We’ll need to keep an eye out on AMC’s levels to identify whether this is the reversal from a descending wedge pattern, or whether there is still room for AMC to fall before a massive breakout.
Now I want to switch it over to the weekly timeframe and show you why big price action is actually inevitable.
On the verge of transitioning from ‘Sell’ to ‘Buy Momentum’
If you’ve watched my 3-part video series on day trading, you know that one indicator I use is the TTM Squeeze indicator.
This indicator measures buyer vs seller momentum and is a strong confirmation bias signal pointing towards big and upcoming price action.
We can see that the TTM Squeeze indicator showed bullish momentum when AMC spiked to its all-time high back in June of 2021.
We then begin to see a drop in bullish momentum (green) and transition to a bearish momentum (red) indicating a big move about to happen on the downside.
Well now, the weekly timeframe is showing a possible transition from bearish momentum to bullish momentum is about to take place.
And when it does, you can bet it will confirm the descending broadening wedge pattern where a massive break may set a new all-time high for AMC Entertainment.
This is bullish news.
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