Benzinga
Published Mar 30, 2022 17:20
Updated Mar 30, 2022 18:10
Why AMC Entertainment Stock Could Go Bananas If This Pattern Holds
AMC Entertainment Holdings, Inc (NYSE: AMC) was trading more than 8% lower on Wednesday after skyrocketing 166% higher between March 14 and Tuesday, when the stock printed a temporary top at the $34.33 mark.
The trading range is completely within Tuesday’s range, however, which has caused the AMC to develop an inside bar pattern on the daily chart. An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.
An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar and each is called an "inside bar."
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A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.
The AMC Chart: AMC reversed course into an uptrend on March 15, with the most recent higher low formed at the $18.86 mark on March 24 and the most recent higher high created on Tuesday at the high-of-day. The stock has since entered into a sideways consolidation pattern on the four-hour chart, which has created an inside bar pattern on the daily chart.
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