AMC Entertainment Holdings Stock Forecast: Will AMC ever break out of this triangle?
- AMC shares are still rangebound waiting for a breakout.
- AMC is stuck in a triangle formation since summer.
- AMC apes seem eerily quiet on social media.
Is AMC ever going to break out of this tightening triangle range the stock has traded in since summer? The range is getting smaller and smaller by the day with yesterday's move seeing AMC stock close up less than 1% at $41.24. Less than one percent moves are not what AMC traders are used to, and many have moved on to other more volatile plays. Social media sentiment toward AMC is dropping, and the stock rarely makes WallStreetBets' number one most discussed anymore. At some stage, a catalyst will emerge to change this, and that is what we will wait for.
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AMC graph, 15-minute
As we can see from the above chart, AMC had another small range with little direction on Monday.
AMC stock news
Part of the reason is the news flow on AMC has died down. Electic vehicle (EV) stocks have taken all the interest lately with the Rivian (RIVN) IPO and Tesla powering on. Smaller EV names such as Sono Group (SEV) and Canoo (GOEV) have robbed AMC of some momentum. These retail names are all about momentum, and when it dries up there is little activity. No one dares short these names, and with no fresh buying we have a resultant stalemate.
The holiday season officially kicks off with Thanksgiving on Thursday, and this is traditionally a strong season at the box office. That may provide a catalyst but at this stage that positive news is more than built into the overpriced AMC stock price. Saying it is overpriced is not meant as an insult. The underlying valuation remains way out of line with fundamentals, but momentum can do that, and AMC is far from the first time that has happened.
AMC stock forecast
Even looking at the 15-minute chart, there is not a huge amount of volatility here. It is no wonder retail traders have looked for other stocks to trade. Since the start of November, AMC has not really moved much in either direction from $40. No surprise then that $40.06 is the point of control – the price with the highest volume that acts as an equilibrium price.
The AMC daily chart below shows the triangle formation clearly but no breakout as of yet. A strong move to the upside will need to break $45.95 for confirmation. This is the earnings high. Then the target becomes $52.79. Breaking $34.60 will then lead to $29.82 and the 200-day moving average also where there is a strong support zone. A catalyst is needed though.
AMC 1-day chart
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
