AMC Entertainment Holdings, Inc (NYSE:AMC) was trading down over 3% on Tuesday as the company heads into its fourth-quarter earnings print after the close.
When AMC printed its third-quarter results on Nov. 8, the stock closed down 11.38% the following day and continued in the steep downtrend, which has brought the stock down over 74% from its June 2, 2021 all-time high of $72.62.
For that quarter, AMC reported revenue of $755.6 million, which beat the $708.3 million consensus estimate. The company reported a loss of 44 cents per share, beating a consensus estimate of a loss of 54 cents per share.
Analysts expect AMC’s revenue to have grown considerably for the December quarter, estimating that AMC will report a loss of 26 cents per share on revenue of $1.09 billion.
Regardless of how AMC reacts to its earnings print, there’s a pattern with strong levels that has developed on the chart, to which the stock is likely to react. It should be noted, however, that stocks can react irrationally to earnings, sometimes rising after an earnings miss or falling following a beat. Moreover, a company’s guidance for future quarters can often fuel the post-earnings direction of the stock.
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The AMC Chart: After a short-lived uptrend that began on Jan. 28 when AMC hit a bottom at the $13.40 level, the stock reversed south at the $20.96 mark on Feb. 10. Since that date, AMC has made a lower high and a lower low, confirming the stock is trading in a downtrend.
- On Monday and Tuesday, AMC attempted to climb above the $19.43 level but rejected and wicked from the area, which indicates the stock is bumping into sellers at that level. The combined price action may be the next lower high in the downtrend, although Wednesday’s candle will be needed for confirmation.
- AMC’s relative strength index (RSI) is measuring in at a comfortable 50%. This indicates the stock has room to move in either direction significantly before becoming overbought or oversold and the indicator leans neither bullish nor bearish.
- On a positive note, AMC is holding above the eight-day and 21-day exponential moving averages (EMAs), which is bullish and if AMC can continue to trade above the levels, the eight-day EMA will cross back above the 21-day, which would give bulls more confidence going forward.
- AMC has resistance above at $20.36 and $25.79 and support below at $17.07 and $14.96.
