AMC Stock Price – Bearish as a Triangle Breaks Lower

Summary:

AMC stock price looks bearish as the market broke down from a contracting triangle. The reversal pattern may lead to further losses.

AMC stock price consolidated for more than one month in a triangular pattern. For a long time, it looked like the market formed a pennant formation, a bullish continuation pattern. However, the recent move lower suggests the triangle may have acted as a reversal pattern, and now the market looks ready to push for more downside.

The stock market in the United States declined yesterday. The Dow Jones index had a negative day, down over one percent at some point, but the futures recovered. If the risk-off environment continues today, the AMC stock price may put pressure on the downside, where the $40 level looms large.

Out of a total of nineteen analysts that track the AMC stock price, only four maintain their buy ratings, while eleven have neutral ones. The main problem with AMC is that the company continues to lose money. It lost money in 2021, earning -$3.28, and it is forecast to keep losing money in 2022 and 2023.

Until the next earnings report in August, investors are likely to focus on the activity on main meme stocks. AMC is one of the most shorted companies in the world, but the retail community pushed its price higher via a combination of bullish call option strategies that led to a massive squeeze higher. As a result, the AMC stock price is up over 1000% in one year, an incredible performance by all standards.

AMC Technical Analysis

The technical picture turned gloomy on AMC’s stock price after the triangle broke lower. What looked like a bullish triangle now appears to have reversed the course, and the traders will focus on a move below $40.

The invalidation area for AMC is a move above $60. While below, the bias remains bearish. Bears may want to stay short with a stop close to $60 and target a move back below $30.