Price Rejection?
AMC released a preliminary statement for their upcoming quarterly earnings report. This caused quite a bit of action in after-hours trading on Friday after the close.
The rhetoric in the preliminary statement sounded confident, but there was a mention of continued earnings pressure due to the Hollywood strikes that occurred a long time ago. This mention led to an after-hours sell-off. You can see how the market responded to the report in the chart below. It erased all of the days gains in after hours trading.
There was a sharp spike up in price, which was quickly followed by a swift sell-off. It is interesting to see that the price action rejected the exact technical resistance level that I mentioned in my previous AMC comments. This was the previous all-time low that was printed before the last major sell-off.
It is also interesting that the preliminary statement was released just as the price action had reached a major key resistance level. What a convenient coincidence right? Major catalysts convienently occurring at major technical levels. You will see this often in your chart analysis. Sometimes it makes placing a trade very easy.
Check out my previous comments about AMC in the link directly below.
So, what do you think, Moo'ers? Will AMC climb above that key resistance level? Or will AMC continue its debt induced freefall?
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Stock_Drift : I think $3.75-$4.00 is possible, even if it retreated back. $AMC Entertainment (AMC.US)$
Methodman10 : thinking we start the week testing that area again, slightly pull back and end near 4. before earnings 4.25
SpyderCallOP Stock_Drift: You could be right. It was just an after-hours move, after all. But the move was based on guidance. So, that makes it a bit more worrisome to see this reaction in AMC's stock price. Guidance is a great price catalyst.
SpyderCallOP Methodman10: You could be right. who knows?
Stock_Drift SpyderCallOP: It was busy, you are correct!!
MindOverMatter SpyderCallOP: That looks bearish to you?Your on the 30 minute right?
SpyderCallOP MindOverMatter: I'm mainly looking at that price rejection that happened almost perfectly at the key resistance level I mentioned. Rejections at key levels are a big red flag for me. Of course I need to see some follow through because it was just an after hours move. But when you follow bearish rejecrions at key levels due to legitimate catalysts, then it doesn't look more textbook than this. Again, I need to see some follow through because this is just an after hours move.
That is basically how I am seeing it. But I am more bearish than I think you are towards AMC. So I am sure that we are seeing things differently. Confirmation bias and cognitive dissonance are a real thing in investing.
In the ultra short-term it may look like a buying opportunity based on KDJ. But that is the very very short-term picture. And KDJ is a very fast oscillator. Any investment decisions based on fast oscillators on the 30-minite candles should be considered for very short-term swing trades.
Of course you could always watch the lower time frames in order to attempt to time a reversal. But that can be hit and miss when compared to analyzing the longer timeframes.
SpyderCallOP MindOverMatter: Here are some examples of very oversold reading on KDJ that were not met with very much bullishness. The price kept falling. Price action dictates the movement of the indicators. The indicators do not dictate the price action.
MindOverMatter SpyderCallOP: Here's 2 candles on the weekly
MindOverMatter SpyderCallOP: what do you believe next week's will print?
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