Can AMC Regain Its Prior Highs? The Charts Give a Hint.

AMC Entertainment has been all over the big screen this week with a powerful multiday rally. Can it maintain its momentum?
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Like GameStop  (GME) - Get Report, AMC Entertainment  (AMC) - Get Report just never seems to fade from relevance these days.

The shares are up about 4% so far on Friday but were much higher -- 12% -- earlier in the day. That follows Thursday’s action where the stock jumped more than 23%.

The move comes on news that AMC will raise more capital, putting almost $500 million in its coffers.

Investors aren't worried about debt or dilution at this point. They want reassurance that AMC will be in a good position going into what they hope is a strong rebound from COVID-19.

With additional capital raised, that assurance is being granted. Keep in mind, the company raised capital earlier in the year, too.

The question now becomes: How much upside could be in the stock price? Let’s look at the chart.

Trading AMC Stock

Daily chart of AMC stock.

Daily chart of AMC stock.

Earlier this week, AMC struggled to give us a weekly-up rotation over last week’s high, as well as clear the 50-day moving average.

After a couple of tries, it finally ignited through this area on Thursday. As previously mentioned, the shares closed more than 23% higher that day, although the stock was up as much as 38% at the day’s high.

Either way, it’s clear that the momentum has been with the bulls lately. The stock is working on its sixth consecutive daily gain and sits just below a key area on the chart.

That level is $14.59, which is the 61.8% retracement of the explosive rally we saw earlier this year.

Before we dissect that level, though, let’s focus on a few others. With AMC’s powerful rally on Thursday, the shares not only went weekly-up, but they also went monthly-up by rotating over the April high at $12.22. The stock also cleared downtrend resistance.

The latter has been pretty stout resistance over the past few months.

To clear these levels so impressively makes them key going forward. Specifically, I want to see AMC stock stay above the April high. Moving forward, that’s the goal.

On the upside, the $14.50 to $14.60 zone looms large. Above it not only puts AMC over the 61.8% retracement, but also over the March high and prior resistance. That could open up $17 and potentially higher.