Nothing special happened on Tuesday to trigger the move, but something awoke the sleepy Reddit stocks.
It started with GameStop (GME) - Get GameStop Corp. Class A Report, which opened higher by about 1%, dipped toward flat on the day, then quickly found itself up about 6% in the first hour of Tuesday’s trading session.
Even then though, it wasn't a runaway trade, with shares chopping around in the first few hours. By the end of the day though the stock had closed higher by 27.5%.
AMC Entertainment (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report wasn’t going to miss out either.
At one point, shares were up 31%, although the stock closed higher by “just” 20% on the day.
BlackBerry (BB) - Get BlackBerry Limited Report and a few others followed the move, but the rally we saw in the meme-stock leaders certainly has investors’ attention again. Can this group put the squeeze back on?
Trading AMC Stock
AMC stock ended May on a hot streak and came exploding higher into June. After topping out near $70, it still had investors wondering if $100 or higher would be next.
Unfortunately for those bulls, shares found the $60 to $65 area to be resistance. From there it began a precipitous decline.
After initially bouncing from the $40 mark, this level failed as support, then turned into resistance. On the downside, the $30 level ultimately held as support until the 21-week moving average caught up and was able to give AMC stock a lift.
Now bursting through its major moving averages, AMC stock is back above the 50-day moving average. Further, we have a nice two-day high to measure against on the upside, near $48.25.
We essentially have an inside doji candle forming based on the current price action from Wednesday.
That’s a great consolidation pattern, which can give use a strong rotation in whichever direction the stock ends up going.
What bulls want to see from here is a rotation over $48.30. That gives us a strong move over this week’s high and puts $50-plus on the table.
If AMC is able to hurdle $50, the 61.8% retracement could be next, up near $56. Above $56 and the $60 to $65 resistance zone is next.
On the downside, watch for a break of Wednesday’s low (currently at $43.17) and the 50-day moving average. Below the latter and $40 or lower could be on the table.