AMC, Descending-Triangle, C19-Variant Could Roast Sector-Stocks!Hello There!
Welcome to my new analysis about the AMC, Theatres Entertainment Stock on the daily timframe perspectives considering important Price Action currently moving the Stock Price. As I mentioned already in previous ideas the current Sector-Stock Market is highly fluctuend with some major Sector-Stocks showing substantial upside potentials while others have a higher possibility to set-up a major pullback and continue with bearish inclinations. These differences within the Sector-Stocks Market should be evaluated when considering either a long-, short-, or total-return-approach. In this case I have detected a interesting Stock on the Watchlist currently that has a substantial possibility to be a main short-candidate in the current market dynamic. This stock is AMC, Theatres Entertainment and there are several factors to consider for the stock from a financial markets perspective, a technical perspective, and the recent important news that could trigger a main sell-out for the sector the stock is located in.
Considering the recent news it has to be pointed out that health officials within the U.S., Europe, and Asia region reported about a new Covid-19 variant called "Eris". This new variant already caused the hospital activity related to Covid-19 to rise above 40% which is a serious dynamic because when the hospitals should "struggle" to take up new cases like it has been reported within the Covid-19 outbreaks in 2020 this could possibly trigger new Corona-related lockdowns in the affected regions. Now, to put this dynamic into the perspective for AMC it is important to determine the relation here. As AMC has Theatres and screens all over Europe, the U.S., and parts of other regions Corona-related lockdowns in this region could trigger the Theatres and screens to close in a mass-manner similarly as it has been taken place already within the huge lockdown-waves of 2020. This means that such a dynamic in the entertainment sector could lead to the investors holding AMC could sell-off the stock in mass, especially within such a sector the related bearish wave could reach a strong momentum similarly as it has been already determined within the past.
From a technical perspective the dynamics have a highly similar outlook and despite a fundamental bearish inclination the technicals are also pointing to a more bearish outcome likelihood to show up in the next times. When looking at my chart AMC is building this gigantic descending-triangle-formation with the coherent wave-count within the formation and the coherent wave-count already advancing further extensively with the coherent head-and-shoulders-formation within the wave-count about to complete with a bearish wave to the downside. Once the local head-and-shoulders-formation has been completed there is a emensely high possiblity for the next confirmation to show up within the next time because once AMC broke out below the lower boundary of this gigantic wedge-formation this will point to the continuation and substantial extension of the major wave-E within the wave-count and continue into the directions till the main target-zones have been reached. Besides that there are also other signs pointing to this scenario in the market such as the high-likelihood bearish EMA-crossover to setup in the near future because such a crossover will happen once the 200-EMA marked in red has crossed below the 100-EMA in green.
Taking these two main underlying conditions for the stock into the perspective, the fundamentals of a potential sell-out for the Sector-Stocks due to potential lockdown waves resulting of the new variant and the major fact that all technical indications point to the bearish scenario, the bearish scenario for AMC should be highly considered to emerge within the next times. Once the whole technical descending-triangle-formation has been completed as marked the targets shown will be activated and once these targets have been reached it will be important how the market reacts into the target-zone and if there is a strong signal in the Sector to reverse a bearish dynamic and point to a technical reversal once the targets have been reached. It will be indeed a interesting dynamic to determine and therefore we will keep having the stock on our watchlist to determine important changes. It will be a important dynamic to determine a positioning on the right side of the market.
In this manner, thank you everybody for watching the analysis, support from your side is greatly appreciated.
VP
