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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?

Like GameStop  (GME) - Get GameStop Corporation Report, AMC Entertainment  (AMC) - Get AMC Entertainment Holdings Inc. Class A 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.

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Daily chart of AMC stock.

Daily chart of AMC stock.

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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.