AMC Entertainment Stock Soars Into Resistance: What's Next?

AMC Entertainment Holdings, Inc AMC is ticking higher again on Tuesday. On Monday Benzinga reported options traders continued to slap the ask on bullish call contracts. Together, the traders bet over $1.9 million AMC would trade higher and they were right.

On Tuesday, options traders were mixed and a number of bearish puts were purchased although in total, more money was placed on calls. At 9.52 a.m. one option trader paid a whopping $437,500 for a single order of calls with a strike price of $37 expiring Sept. 10. The trade was for 680 AMC options at $5 per piece.

The bearish traders may have noticed AMC rejected and wicked from an upper resistance level near the $39 mark.

See Also: How to Buy AMC Stock Right Now

The AMC Chart: AMC reached a low near the $29 mark on Aug. 5 and Aug. 11, which created a bullish double bottom pattern. The stock then rebounded and headed north over 32% before slamming into the upper key level of support and resistance.

Although AMC has already made a massive move higher over the past four trading days, its relative strength index is measuring in at a very comfortable 50%. This indicates AMC’s stock could rise much higher still without entering into overbought territory above the 70% level.

AMC was able to regain support of the eight-day and 21-day exponential moving averages (EMAs) on Tuesday after being pinned between the two EMAs on Monday. The eight-day EMA is still trending slightly lower than the 21-day which is bearish, but the eight-day has begun to curl upwards and with continued momentum looks set to cross back up above the 21-day EMA.

If AMC closes the trading day near the $38 mark it will avoid printing a shooting star candlestick, which could indicate a period of consolidation was needed. Bulls will want to see AMC close near its high-of-day, which will cause it to print a bullish Marubozu candlestick and could indicate higher prices will come again on Wednesday.

• Bulls also want to see big bullish volume push AMC back up above the $39 level. If it can regain the level as support, it has some mild resistance at $43 and $46.
• Bears want to see bearish volume come in and knock AMC’s stock down below the eight-day and 21-day EMAs. If the stock loses the levels as support, it could revisit $31.81.