[TA] AMC is aiming for 32$ (Cup & Handle, 1H) via /r/wallstreetbets #stocks #wallstreetbets #investing

[TA] AMC is aiming for 32$ (Cup & Handle, 1H)


We’re looking at the 1 hour chart for the AMC stock price and things look quite good after the recent drop in the whole stock market.
The previous downtrend was very intense and got extended by fear about inflation & the planned interest rate hikes throughout 2022. We saw the market bottoming out about 3 weeks ago. While the whole market is retracing, we see different patterns emerging among the many stocks we can trade. The AMC stock price is currently printing a Cup & Handle on the intraday chart.

We could’ve spotted the trendchange for the stock price with a “change of market structure”, a very basic but powerful pattern (covered that in one of my videos extensively). The price is moving from lower highs to lower lows within a downtrend. As soon as we see a change of structure, the price will aim for higher highs and higher lows. The circumstance is underlined by a rounding bottom, which forms the cup.
What we want to see is decreasing volume during the downtrend & increasing volume during the uptrend. This translates to the sellers being exhausted and the buyers being back in control.

The price is sitting right below a key level at 20$, which has been relevant for the past 5 years. We saw many support/resistance flips at this price level and the chances for breaking this level within the current upwards trend are pretty high. This price is the break-out level we’re looking for.

During the past trading-days, we can observe the price being rejected at the 20$ mark multiple times. Still, buyers manage to push the price further in this direction – which increases the probability for the breakout. I’m also expecting this price level to be an important support during 2022.

When we’re looking for a target projection for the Cup & Handle pattern, we measure the decrease in price from the breakout level to the bottom of the Cup (53.18%). We use the same size to project a target from the breakout level, which brings us to 32$. Coincidentally this price is also our previous high from December 2021 and the starting point for the downfall. We can expect some sell pressure there (traders breaking even or taking profit).

I’m expecting the price to aggressively move towards the 32$ level within the next 3 weeks. Those 3 weeks are leading to the earnings, which are expected to be better than the forecast. I don’t think that this is priced in yet and especially short-term traders will join the train for short-term gains. This additional momentum, combined with the option market/ shorts being liquidated, will fuel the upcoming breakout.

Looking forward to it! I’ll keep you guys updated.

Submitted February 17, 2022 at 12:25PM by ares_abi
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