AMC Stock Could Really Start Turning Around If It Breaks This Key Level

AMC Entertainment Holdings Inc. AMC shares are trading higher Tuesday after the company announced preliminary fourth-quarter financial results. 

AMC reported preliminary quarterly revenue of $1.1716 billion, which is above the Street estimate of $1.09 billion and up from $162.5 million year-over-year.

AMC stock was up 14.76% at $18.43 midday Tuesday. 

See Also: Why AMC Entertainment Shares Are Trading Higher Today

AMC Daily Chart Analysis

• Shares have been trading in a downward trending channel after falling out of what traders call a pennant pattern. The price has been climbing and nears the resistance of the channel. A break above this resistance could signal a trend reversal is coming.
• The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue). This indicates bearish sentiment, and each of these moving averages may hold as an area of resistance in the future.
• The Relative Strength Index (RSI) has been climbing the past few days and now sits at 34 on the indicator. This shows that the stock is seeing buyers move into the market, although the overall amount of sellers still remains greater than the buyers.

What’s Next For AMC?

AMC is seeing a period of bearish movement after falling below the pennant pattern and now trades in a descending channel. Until the stock sees a resistance break of the channel, it will continue to trade in this channel fading lower.

Bullish traders are looking to see the stock break the channel resistance and start to form higher lows. Bulls are also looking for a break over the moving averages in time. Bearish traders are looking to see the stock continue to trade lower within the channel and be able to hold below the moving averages.

Photo courtesy of AMC.