On Thursday evening, Benzinga asked its followers on Twitter (NYSE:TWTR) what stock they’re most focused on to end the week. From the replies Benzinga selected one ticker for technical analysis.
@Esturban3 @gt_uln, @alberto92445611 and @Boosted_STI responded to say they’re focused on AMC Entertainment Holdings, Inc (NYSE: AMC).
AMC was trading about 3% lower on Friday and testing the $9.20 level as support. Over the last three days, AMC has declined toward that level but bounced up to close each of the sessions slightly above the area.
The stock may continue to trade sideways for a period of time in order to consolidate the large decline that took place between Aug. 17 and Aug. 24, when AMC fell almost 40%. Volume has been declining since Aug. 22, which suggests the stock is running out of sellers.
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The AMC Chart: On Aug. 18, AMC plunged almost 12% and closed the session under the 200-day simple moving average (SMA). The 200-day SMA is an important bellwether indicator that suggests whether a stock is trading in a bull cycle or a bear cycle.
When AMC lost the 200-day SMA as support, the bears took firm control and momentum to the downside has caused the stock to lose the 50-day SMA as well, which indicates longer-term sentiment has turned bearish.
AMC is trading in a confirmed downtrend, with the most recent lower high formed on Thursday at $9.94 and the most recent confirmed lower low printed at the $9.23 the day prior. If AMC closes Friday’s session under the $9.20 level, traders can watch for the stock to eventually print a bullish reversal candlestick to indicate when the next bounce to the upside may take place.
The declining and lower-than-average volume suggests that either a bounce or a period of sideways trading is likely to come soon. As of press time, AMC’s volume was measuring in at about 9.6 million compared to the 10-day average of 67.04 million.
AMC has resistance above at $9.90 and $12.22 and support below at $8.51 and $7.47.
See Also: Is AMC Stock Overvalued? Blame Retail Investors, Analyst Says
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