AMC Stock: Buy or Sell on Earnings? Let's Look at the Chart

--  AMC Entertainment is giving up almost all of its post-earnings gains. Is it a buy or sell here? The chart has a pretty clear roadmap. --

By Bret Kenwell, TheStreet.com

Despite all the volatility that AMC Entertainment (AMC) has been known for, shares were up just 1.5% on Tuesday after reporting earnings.

However, at one point the stock was up almost 10% earlier in the day and was strong in premarket trading as well.

The company reported a narrower-than-expected loss and beat on revenue expectations. Guidance was solid too.

However, a teaming-up of meme stocks could be underway as well.

AMC hinted at a possible partnership with GameStop (GME), while also mentioning that it plans to accept Bitcoin as a form of payment by the end of the year.

Despite all that - a strong report and several bullish catalysts to look forward to - the stock is struggling for direction.

Let's look at the chart to see if there's a technical angle to AMC Entertainment.

Trading AMC Stock

Daily chart of AMC stock

Chart courtesy of TrendSpider.com

Seeing AMC stock give up a bulk of its post-earnings gains is disappointing. But it's also disappointing that the stock faded so hard from its 21-day and 10-week moving averages.

This may not necessarily suggest that the bears are in charge, but it sure doesn't prove that the bulls are running the show. If anything, it was a blown opportunity.

If the bulls were in charge, this stock would have reclaimed these two key moving averages, which have both been acting as resistance. By doing so, it would put the $40 area on the table and allow the 10-week and 21-day moving averages to act as potential support.

We're not seeing that development - at least not yet.

If that does happen, the same scenario is in play with the $39.50 to $40 zone being the next focus area. Above that puts the 50-day moving average in play, followed by a potential push to $50.

On the downside, it would be a real shame to see AMC stock take out Monday's low (which is also this week's low) at $32.35.

If it does, that puts the $30 to $31 area in play, as well as the 21-week moving average. These levels have been acting as support, but if they fail, $20 to $25 could be in play, followed by the 200-day moving average.

So what's the bottom line? Above Tuesday's high and bulls can regain control. Below Monday's low and bears can seize control. In between is a toss-up.

From TheStreet.com