AMC Entertainment stock closed at $6.12 on Tuesday.
The movie theatre chain stock was unable to break below $6 after a big support level was tested at least five times.
Does this signify AMC Entertainment stock has reached the bottom?
It’s certainly a possibility since the level has proven to be a big demand zone in the past.
If institutional investors begin taking advantage of AMC’s dip, the movie theater stock could have a significant bounce.
And as long as the retail community continues to support the company, heavy volume could be underway.
Let’s discuss it.
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Why the $6 Level is Important
The $6 level has proven to be a strong demand zone for AMC Entertainment stock since 2021 before the price began to surge.
This demand zone would take AMC from $6 to $9 and $14 before selloffs from Wanda Group at the time would send the stock back to $6 per share.
After AMC’s split, the stock and its preferred equity have both been on a steep decline.
But AMC isn’t the only stock in a downtrend, the entire market is melting.
Shareholders saw strong support on Tuesday when AMC’s share price could not break below $6.
The stock retested this level at least five times and moved up after hours.
Will institutional investors come in soon?
This is the idea.
Will AMC Stock Keep Going Down?
AMC has a strong demand zone around $6 per share, which means it could send the stock back up to retest higher levels.
However, if the price breaks below this demand zone, it’s possible AMC sees lower share prices and the demand zone becomes a level of resistance.
It would be ideal for a combination of both retail and institutional investors to come in and pick up shares at current levels.
Heavy buying pressure could replicate the events that occurred in June of last year when the stock shot up to $72 per share.
But this is going to require a lot of buying power on the intraday charts.
I’m curious to know what you think.
Leave your thoughts below.