AMC Entertainment Holdings Inc (NYSE:AMC) was thrown into the GameStop Corporation (NYSE:GME) controversy at the end of January and has since entered into a long consolidation pattern.
When AMC reported its fourth-quarter earnings results on March 10, it got a 40% boost over the following four days. AMC is set to print its first-quarter 2021 earnings Thursday after the closing bell.
In its last earnings print, AMC reported earnings per share loss of $3.15, a year-over-year decrease of 1,000%. It reported revenues of $162 billion for the quarter, which beat the Street estimate of $142.35 but accounted for an 88.78% decrease from the same period the previous year.
AMC has, so far, dropped in the lead up to its earnings release but with lowered expectations, a bullish reaction could help breathe life back into its stock.
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The AMC Chart: AMC closed Wednesday on a key support level at the $9 level. The stock has been trading in the $9 to $11 range for the past 30 days and has had very low volume. The low volume indicates there are very few sellers and buyers.
There is a possibility AMC’s stock could be setting into a bearish head and shoulder pattern. If the stock raises up slightly to complete the right shoulder of the pattern, the stock could fall through the $9 support level if that pattern is recognized.
AMC’s stock is trading below the eight-day and 21-day exponential moving averages (EMAs), which is bearish. On Tuesday the eight-day EMA crossed below the 21-day EMA, which is also not a good sign for the bulls as these two EMAs will not act as resistance. AMC is trading above the 200-day simple moving average, however, which indicates overall sentiment in the stock remains bullish.
Nevertheless, the bullish or bearish direction will likely be determined with an increase in volume.
Bulls want to see a bullish reaction to earnings and for big bullish volume to come in to push AMC’s stock up over resistance at $11.32. If the stock can regain that level as support, it has room to move towards $14.32.
Bears want to see a bearish head-and-shoulders pattern set up or for a negative earnings reaction to bring in big bearish volume to drop AMC below support at $9. If AMC’s stock loses that level of support, it could fall to the $7.50 area.
AMC Price Action: Shares of AMC were trading down 1.5% at $9.02 at the time of publication.