AMC Entertainment Holdings (AMC) Stock Forecast: Can the apes hold key $40 support?

AMC continues to just about hold onto the bullish trend it established with a powerful 20% surge back in late August. That took the meme stock back into the headlights of many a retail trader, but ever since AMC has been struggling for momentum. Thankfully, the stock has not given up too much ground, so we can take it as a pause period after a strong move. Generally, these consolidation phases after such a strong breakout are good news as a stock recharges before pushing even higher. To do so though, the stock has to follow a few rules.

First, it cannot consolidate for too long. The longer the period of consolidation, then the more power bears get and the less likely the move is going to continue. A strong move needs to consolidate and push on. Secondly and perhaps most importantly and also obviously a stock cannot break up through a key level and then break back below it. This ends the trend. A stock can retrace to test the breakout level, but it must not break lower. Retesting a level should see buyers who missed the first move waiting to snap up more stock and defend the price. That is, if the move is truly bullish.

AMC so far has held the breakout level at $40, and it has been back to retest it. So far so good. In order to push on, the next level to break is $48, and it is taking time to break through here. AMC stock has had two attempts to break $48 so far, so is the third time the charm? Noted AMC trader Trey Collins (Trey's Trades @TradesTrey) certainly thinks so, but he uses the rule of four! We are not too fussy about whether it is three or four attempts, but AMC needs to break $48 soon to keep the move going.

AMC key statistics

AMC stock forecast

Your mission, should you choose to accept it, is to help AMC get above $48 and push on. Once through $48, the volume profile bars shrink, meaning less resistance and the possibility the move can accelerate. Breaking $48 opens the door for a swift move to $60. Nothing is ever certain in this game, but less volume means price moves can accelerate sharply to the next area with large volume, and that area is near $60.  AMC needs to hold above $40 and break $48, preferably this week, to get the movie going (see what I did there?). Otherwise, going below $40 ends the bullish trend and puts it back in a more neutral move.