AMC Setting Up
AMC has been in this pennant since that ridiculous run in June that we all remember. Meme stocks popped due to reddit and robinhood retail investors taking advantage of the huge % of shorts by institutions. We saw something that has never been seen before and we may be looking at a round two, on a smaller scale however.
AMC has made its 5 legged pennant (A,B,C,D,E) and looks to be primed to break out above the upper trendline, and then the resistance at the $51- $52 level. It has been obeying very close to the fib retracement levels so make sure to keep an eye on each level as AMC continues it's path in this pennant and the potential breakout.
Volume is falling while price is RISING so tread carefully as this is a BEARISH divergence sign.
MACD crossed after that falling wedge pattern we played earlier last week, which is a good sign.
Not all signs are looking good but it is a RISKY trade.
I anticipate a retest of the lower trendline, at around $39 - $40, where you can enter the trade. If it does not retest, I would watch the yellow rectangle area I drew which could be the nearest support, and best BUY area if you are bullish as well.
REMEMBER: this pattern is not always a BULLISH pattern. It can turn BEARISH if AMC breaks down below the lower trendline, so tread carefully. With stocks like this, hyped meme stocks, things can go south very quickly, just as fast as they can turn profitable.
KEY LEVELS:
$40 - IF AMC can hold this level, I will be very bullish on this stock and will be aiming for around the $49-50 level.
$50 - over 50, needs to break 52 then I believe it can fly with some injection of volume, so keep your eye on the volume.
Taking some shares at this level, as a starter position. Taking my time to enter any option calls or puts.
CALLS:
19 Nov 40C looks good, with over 5k in open interest (OI)
21 Jan 40C is your best bet if you can afford it, with over 29k in OI
** You can also do spreads in order to limit your risk, a vertical spread with 19 Nov 40C and selling the 45C is around $180, giving you a $320 potential max return. Pretty decent risk to return.
AMC has made its 5 legged pennant (A,B,C,D,E) and looks to be primed to break out above the upper trendline, and then the resistance at the $51- $52 level. It has been obeying very close to the fib retracement levels so make sure to keep an eye on each level as AMC continues it's path in this pennant and the potential breakout.
Volume is falling while price is RISING so tread carefully as this is a BEARISH divergence sign.
MACD crossed after that falling wedge pattern we played earlier last week, which is a good sign.
Not all signs are looking good but it is a RISKY trade.
I anticipate a retest of the lower trendline, at around $39 - $40, where you can enter the trade. If it does not retest, I would watch the yellow rectangle area I drew which could be the nearest support, and best BUY area if you are bullish as well.
REMEMBER: this pattern is not always a BULLISH pattern. It can turn BEARISH if AMC breaks down below the lower trendline, so tread carefully. With stocks like this, hyped meme stocks, things can go south very quickly, just as fast as they can turn profitable.
KEY LEVELS:
$40 - IF AMC can hold this level, I will be very bullish on this stock and will be aiming for around the $49-50 level.
$50 - over 50, needs to break 52 then I believe it can fly with some injection of volume, so keep your eye on the volume.
Taking some shares at this level, as a starter position. Taking my time to enter any option calls or puts.
CALLS:
19 Nov 40C looks good, with over 5k in open interest (OI)
21 Jan 40C is your best bet if you can afford it, with over 29k in OI
** You can also do spreads in order to limit your risk, a vertical spread with 19 Nov 40C and selling the 45C is around $180, giving you a $320 potential max return. Pretty decent risk to return.
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