Has AMC Stock Just Hit Bottom or Is This Selloff Just the Beginning?

The meme trade hasn’t been going all that well lately. AMC Entertainment , GameStop and others have been under notable pressure over the past few sessions.

© TheStreet Has AMC Stock Just Hit Bottom or Is This Selloff Just the Beginning?

Shares, however, have been enjoying nice gains on Thursday.

So far this week, AMC stock has fallen 21.5%. Assuming it closes lower for the week, it will mark the stock’s fourth straight weekly decline.

Amid that stretch, shares have seen a peak-to-trough decline of 49%. From the highs in the beginning of June, those losses eclipse 55%.

Despite all that, shares have gained almost 300% from the May lows. So it’s hard to say that bulls haven’t been rewarded. That is, assuming they were long coming into June.

In any regard, the stock has been incredibly volatile.

Even after the company said it wouldn’t raise any more capital in the short term, the market still didn’t want to own it.

What do the technicals look like? Let’s look at the chart.

Video: #AMCDay Is Trending, Jim Cramer Says ‘HOLD’ AMC Stock (TheStreet)

#AMCDay Is Trending, Jim Cramer Says ‘HOLD’ AMC Stock
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Trading AMC

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On Tuesday, AMC tested but held last week’s low near $38.75. On Wednesday though, that level broke as shares plunged lower and knifed right through the 50-day moving average.

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The weekly-down rotations have been key focus points for traders, as we’ve seen plenty of abrupt pullbacks as a result of these rotations.

The one positive to the recent price action is that AMC stock filled the gap at $33.53.

However, there’s already a caveat to that too, which is that AMC is now struggling to reclaim last week’s low and the 50-day moving average. That’s not a good look and a gap-fill level isn’t much to lean on when it comes to support.

Just like this stock’s moves to the upside were exacerbated, so are the moves to the downside. If AMC can’t hold the $30 level, it’s not out of the question that we see a test of the 21-week moving average and the weekly VWAP measure down near $24.

I know that sounds scary – after all, it is another $10 below current levels – but that’s the picture the technicals are painting.

If AMC can hold $30 and better yet, hold $33.50, it needs to to reclaim the 50-day moving average. Back above that mark and we may be able to see it garner some upside momentum.

Use caution with these meme stocks.

This article was originally published by TheStreet.

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