Trading Strategies For AMC Entertainment Stock Heading Into Q3 Earnings

AMC Entertainment Holdings, Inc AMC was falling over 2% Wednesday ahead of its third-quarter earnings print after the market close.

When AMC printed a second-quarter beat on Aug. 8, the stock closed the following day down 3.73% and on Oct. 11, AMC entered into a steep downtrend after having been unable to regain the 200-day simple moving average (SMA) as support.

For the second quarter, AMC reported earnings per share of zero on revenues of $1.348 billion. The company beat the EPS estimate for a loss of 40 cents per share and the $1.29-billion revenue estimate.

For the third quarter, analysts, on average, estimate AMC will report a loss of 38 cents per share on revenues of $1.17 billion.

Ahead of the event, Wedbush maintained a Neutral rating on AMC and lowered the price target from $19 to $11.

The firm is optimistic AMC could post positive guidance for the fourth quarter due to the ongoing success of Taylor Swift’s "Eras Tour Concert" Movie and Beyonce’s upcoming movie release. Read More Here...

From a technical analysis perspective, AMC’s stock looks bullish heading into the event, trading in an uptrend and having recently regained the 50-day SMA.

It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The AMC Chart: AMC entered an uptrend on Oct. 23 after testing the $9 level as support on multiple trading days and holding above the area. The most recent higher high was formed on Monday at $11.43 and the most recent confirmed higher low was printed at the $10.01 level on Nov. 1.

• On Wednesday, AMC was retracing and attempting to hold support near $10 in order to maintain its uptrend. The stock was working to print a bearish Marubozu candlestick, which suggests at least temporary lower prices could come on Thursday.
• If AMC holds within its uptrend and receives a bullish reaction to its earnings print, the stock is likely to at least fill an upper gap that exists between $11.70 and $12.64. If that occurs, the stock may find resistance near the upper range of the gap.
• Momentum has been steadily increasing in AMC, which is bullish, and the stock is trading above the 50-day SMA. If AMC climbs higher following its earnings print, the stock will regain the eight-day and 21-day exponential moving averages, which would give bullish traders more confidence going forward.
• AMC has resistance above at $12.22 and at $14.68 and support below at $9.90 and at $8.51.

Read Next: S&P 500, Nasdaq Set For Muted Open Today: What's Moving Stock Futures?

Photo via Shutterstock.