Tuesday, September 28, 2021

How AMC Entertainment, GameStop Stocks Look Heading Into the Week Ahead



This article by Melanie Schaffer with my photo is in today's Benzinga.


How do AMC and GameStop look heading into the week ahead? As the apes say, "When in doubt, zoom out.”

Benzinga published an article on Friday about AMC Entertainment Holdings, Inc that addressed various issues regarding the stock including short interest and dark pools trading data. On Sept. 19, an article was published outlining similar issues pertaining to GameStop Corporation’s stock.

The AMC article, which gathered more than 1,800 retweets and 3,700 likes on Benzinga's Twitter, brought to light a split between two different groups of Apes who are fighting for the same cause: full market transparency to give retail traders an equal advantage to financial institutions and hedge funds. As it stands lions are still the king of the jungle and when "divide and conquer" is how the felines capture their prey, it may prove vital for the apes to stick together.

The AMC Chart: On Sept. 13, AMC entered into a downtrend on the daily chart but closed Friday’s session up slightly at $40.01. The stock printed a doji candlestick, indicating a reversal to the upside may be in the cards, which could indicate a trend change if AMC can now make a high above the $42 level. The stock will have some mild resistance at the $41.50 level to break through before that point.

Zooming out to look at AMC’s chart from earlier in the year, there is a long-term ascending trendline in play that has been propping the stock up every time the trend is tested as support. On Sept. 21 and Sept. 22, AMC tested the trendline and held above it.

AMC is trading below the eight-day and 21-day exponential moving averages (EMAs), and the eight-day EMA recently crossed below the 21-day, both of which are bearish indicators. The stock is trading about 75% above the 200-day simple moving average (SMA), which is bullish.

  • Bulls want to see big bullish volume come in and drive AMC up to make a higher high, which would indicate a trend change for the bulls. There is resistance above at $43.33 and $48.52.
  • Bears want to see big bearish volume drop AMC down through the bottom ascending trendline of the pattern. If the stock loses the area as support, it could retest $39.07 and below the area there is another support at the $35.59 level.

amc_sept._26.pngThe GameStop Chart: Like AMC, GameStop is trading above a long-term ascending trendline the stock has been holding above since its initial break out on Jan. 13. The stock has tested the level as support seven separate times and held above it.

GameStop created a triple bottom pattern on Sept. 20, Sept. 21 and Sept. 24 near the $183.50 level. The pattern is considered bullish by technical traders, and if recognized, the bulls should watch for big bullish volume to come in and drive the stock up to make a higher high above $195.43.

There is a gap above on GameStop’s chart between about $288.20 and $297.18. Gaps on charts fill about 90% of the time, which makes it likely GampStop’s stock will trade back up into the range in the future.

GameStop is trading below the eight-day and 21-day EMAs, and the eight-day EMA looks close to crossing below the 21-day, which would be bearish. GameStop is trading well above the 200-day SMA, which is bullish, and the 200-day is trending upwards.

  • Bulls want to see big bullish volume come in and drive GameStop back up over a resistance level at $189.20. If the stock can regain the level of support it has room to trade up toward the $209.85 mark.
  • Bears want to see big bearish volume continue to drive GameStop’s stock down until it loses the lower support at the $178 area. Below the level, there is further support at $169.88.gme_sept._26.png