A Fun Idea and a Little Hope to Help Diamond Hand that AMC
Things look a little bleak, I almost considered selling. So I stared at my chart a while until it didn't look as bad. I don't post too many of these but I don't want to see you guys end up being a bunch of April fools, if you did sell I would try and buy back ASAP. None of this is financial advice, just what I'm looking at and would do myself.
Mar 19 was the beginning of this breakdown, I drew the break of that trend on the RSI. Price fell all the way from there to the .618 Fib level Mar 24 and from there we got a decent bounce to the .5 Fib level before being rejected and coming back down. There was also some beautiful and very obvious bullish hidden divergence between the Mar 4 and Mar 24 bottoms here at 8.90. Which is part of why I was a little shooken up by this most recent drop, but it is still in play and working in our favor I believe.
Where we stop on this move down is anyone's guess, my guess is about 8.90 for a possible double bottom W pattern. So far we've come down to 9.12, its possible this is the bottom but for my idea I'd rather we just go ahead and finish getting down there. Touching the 4 hour 100 EMA at 8.90 just works in the grand scheme of technical analysis for my idea and here's why.
Descending Triangle - So lets say we come down to the 100 EMA of the 4 hour and have a bounce. Currently we're in a descending triangle. I imagine we break out of it on the 6th, maybe the 8th at the latest for the two possible descending triangles we're in. There is another triangle that can end probably the 15th but I'm ignoring that one because then the next part of my plan looks raggedy. Breaking out of the descending triangle upward on the 6th or 8th would give us a measured move target of about 12.10, which it may overshoot just a little. Either way the Mar 23 gap gets filled. Resistance comes at the top of this measured move and price comes down, I imagine it will end up at the trendline we've been working our way up on and also to the neckline of a W pattern we would've just broken out of.
Double Bottom ( W ) ? - This is why I hope we start moving back up and break out the descending wedge by at most the 8th. The cleaner this W looks the more big money pays attention to it I'd imagine. After reaching the Descending triangles measured move of about 12.10 we come back down, it'd be perfect if there was confluence of price coming back and retesting the neckline of the W, and also retesting the upward trendline we've been riding. That should get us to a bounce on April 20th at 11.10. We then work our way up to 13.60 - 14.10 for a fill of the second gap, completing the measured move of the W pattern.
If you draw a trend based fib extension from 8.90 > 12.35 > 11.10 we get a .786 fib level at that matches up with the top of the double bottom's measured move at about 14.05, also filling the final gap.
*** I'm getting a little ahead of myself trying to be three moves ahead probably but its a fun idea and it could work out.
Summarized:
1. 4/1 - 4/7 possibly bounce around sideways and hit 8.90 at least once to test 4hr 100 EMA.
2. 4/6 - 4/8 possibly breakout of a Descending Triangle. Measured move to 12.10.
3. Breakout of Double bottom pattern once the W's neckline at about 11.55 is broken. Hopefully we don't get rejected here and continue Descending Triangle measured move to 12.10.
4. Rejection at Descending Triangle Measured move top of 12.10, Also there's plenty of good resistance here. Price falls back to trendline.
5. 4/20 price reaches the trendline using it as support, also retests neckline of the W pattern giving good confirmation of double bottom W pattern's validity at about 11.55.
6. 4/20 From 11.55ish with W pattern and trendline both confirmed as still valid, we move up to the double bottoms measured move top around the 13.60 - 14.10 area, filling all gaps. Also since this confluence of trend and pattern seem to meet on 4/20, what better day for price to get high? For the memes its a crime if all if this doesn't happen exactly as I've laid out.
*** 1 - 6. If you draw a trend based fib extension from 8.90 > 12.35 > 11.10 we get a .786 fib level at that matches up with the top of the double bottom's measured move at about 14.05, also filling the final gap.
- All of this is invalidated if price drops too far below 8.90. The Descending Triangle and possible Double Bottom pattern would both be taken out at the same time.
- If all of this comes to pass next fib levels for us to target past 14.10 are 14.70 > 16.70 > 19.90
Mar 19 was the beginning of this breakdown, I drew the break of that trend on the RSI. Price fell all the way from there to the .618 Fib level Mar 24 and from there we got a decent bounce to the .5 Fib level before being rejected and coming back down. There was also some beautiful and very obvious bullish hidden divergence between the Mar 4 and Mar 24 bottoms here at 8.90. Which is part of why I was a little shooken up by this most recent drop, but it is still in play and working in our favor I believe.
Where we stop on this move down is anyone's guess, my guess is about 8.90 for a possible double bottom W pattern. So far we've come down to 9.12, its possible this is the bottom but for my idea I'd rather we just go ahead and finish getting down there. Touching the 4 hour 100 EMA at 8.90 just works in the grand scheme of technical analysis for my idea and here's why.
Descending Triangle - So lets say we come down to the 100 EMA of the 4 hour and have a bounce. Currently we're in a descending triangle. I imagine we break out of it on the 6th, maybe the 8th at the latest for the two possible descending triangles we're in. There is another triangle that can end probably the 15th but I'm ignoring that one because then the next part of my plan looks raggedy. Breaking out of the descending triangle upward on the 6th or 8th would give us a measured move target of about 12.10, which it may overshoot just a little. Either way the Mar 23 gap gets filled. Resistance comes at the top of this measured move and price comes down, I imagine it will end up at the trendline we've been working our way up on and also to the neckline of a W pattern we would've just broken out of.
Double Bottom ( W ) ? - This is why I hope we start moving back up and break out the descending wedge by at most the 8th. The cleaner this W looks the more big money pays attention to it I'd imagine. After reaching the Descending triangles measured move of about 12.10 we come back down, it'd be perfect if there was confluence of price coming back and retesting the neckline of the W, and also retesting the upward trendline we've been riding. That should get us to a bounce on April 20th at 11.10. We then work our way up to 13.60 - 14.10 for a fill of the second gap, completing the measured move of the W pattern.
If you draw a trend based fib extension from 8.90 > 12.35 > 11.10 we get a .786 fib level at that matches up with the top of the double bottom's measured move at about 14.05, also filling the final gap.
*** I'm getting a little ahead of myself trying to be three moves ahead probably but its a fun idea and it could work out.
Summarized:
1. 4/1 - 4/7 possibly bounce around sideways and hit 8.90 at least once to test 4hr 100 EMA.
2. 4/6 - 4/8 possibly breakout of a Descending Triangle. Measured move to 12.10.
3. Breakout of Double bottom pattern once the W's neckline at about 11.55 is broken. Hopefully we don't get rejected here and continue Descending Triangle measured move to 12.10.
4. Rejection at Descending Triangle Measured move top of 12.10, Also there's plenty of good resistance here. Price falls back to trendline.
5. 4/20 price reaches the trendline using it as support, also retests neckline of the W pattern giving good confirmation of double bottom W pattern's validity at about 11.55.
6. 4/20 From 11.55ish with W pattern and trendline both confirmed as still valid, we move up to the double bottoms measured move top around the 13.60 - 14.10 area, filling all gaps. Also since this confluence of trend and pattern seem to meet on 4/20, what better day for price to get high? For the memes its a crime if all if this doesn't happen exactly as I've laid out.
*** 1 - 6. If you draw a trend based fib extension from 8.90 > 12.35 > 11.10 we get a .786 fib level at that matches up with the top of the double bottom's measured move at about 14.05, also filling the final gap.
- All of this is invalidated if price drops too far below 8.90. The Descending Triangle and possible Double Bottom pattern would both be taken out at the same time.
- If all of this comes to pass next fib levels for us to target past 14.10 are 14.70 > 16.70 > 19.90
Trade active:
1. Got front run a little. Reached about 9.05 in premarket but only made it to as low as 9.15 instead of 8.90 in regular trading hours. Thanks to where price ended up all targets still mostly valid.
2. Descending Triangle breakout to 12.10 has begun, although I think this move likely overshoots and reaches the next fib level at 12.50 to reach the top of an even greater triangle we need to break out of, a major resistance trendline, or price falls somewhere in between.
*** 11.24 price touch and rejection today has made a third touch confirming a resistance trendline and creating a larger triangle, measured move upon breakout would be 13.80. Funny enough 13.80 is where I think what will end up being our final major resistance trendline is before running to 20+, I expect if we get to 14.10 we may push to the Daily Bollinger bands at 14.40, then we come back down to between 13.80 and 12.80. Assuming we breakout before Friday the breakout level would be 10.80 - 11.00 on this formation. This would start to form an upward channel of bullish price action. First resistance in this bullish move I expect to be 11.40-11.55 at W's neckline.
3. Awaiting break of 11.55. For the W would like to not fall back below 10.40 but now that we have a new triangle confirmed with a target of 13.80 that we only need to break and maybe retest 10.80 - 11 for it instead of the W's 11.55 I don't care about the double bottom as much.
~ Doubt we'll come back down, but things would start to look meh again at 10.20 and extra meh below 9.95, any lower than that and pray its just a wick and gets back above 9.95 that day if not the next. It could happen though, I really wouldn't want to see us break 9.65 at the lowest but even if it does should be fine for a little while. If I wasn't in already I'd be watching and waiting to see what price does between 10.80 - 11.00. To make sure we really broke out of this triangle to 13.80 and beyond I'd be looking for a break of that with good volume, maybe a retracement and to around 11.22 - 10.85 and a bounce back above that.
~ As you can see I've drawn a bunch of triangles, but more importantly the one with the most validity has a vertex deadline of the 13th or maybe the 16th. The rest of these triangles have weak resistances because they haven't proven themselves yet, but even if they were valid the 13.80 price is above all of them. Its the close of the all gaps and a breakout of all possible triangles. Its a big deal like in the way that the break of 6.55 was a big deal if we can get it. For now I don't see any signs saying we won't get it, we're about to see some serious movement.
2. Descending Triangle breakout to 12.10 has begun, although I think this move likely overshoots and reaches the next fib level at 12.50 to reach the top of an even greater triangle we need to break out of, a major resistance trendline, or price falls somewhere in between.
*** 11.24 price touch and rejection today has made a third touch confirming a resistance trendline and creating a larger triangle, measured move upon breakout would be 13.80. Funny enough 13.80 is where I think what will end up being our final major resistance trendline is before running to 20+, I expect if we get to 14.10 we may push to the Daily Bollinger bands at 14.40, then we come back down to between 13.80 and 12.80. Assuming we breakout before Friday the breakout level would be 10.80 - 11.00 on this formation. This would start to form an upward channel of bullish price action. First resistance in this bullish move I expect to be 11.40-11.55 at W's neckline.
3. Awaiting break of 11.55. For the W would like to not fall back below 10.40 but now that we have a new triangle confirmed with a target of 13.80 that we only need to break and maybe retest 10.80 - 11 for it instead of the W's 11.55 I don't care about the double bottom as much.
~ Doubt we'll come back down, but things would start to look meh again at 10.20 and extra meh below 9.95, any lower than that and pray its just a wick and gets back above 9.95 that day if not the next. It could happen though, I really wouldn't want to see us break 9.65 at the lowest but even if it does should be fine for a little while. If I wasn't in already I'd be watching and waiting to see what price does between 10.80 - 11.00. To make sure we really broke out of this triangle to 13.80 and beyond I'd be looking for a break of that with good volume, maybe a retracement and to around 11.22 - 10.85 and a bounce back above that.
~ As you can see I've drawn a bunch of triangles, but more importantly the one with the most validity has a vertex deadline of the 13th or maybe the 16th. The rest of these triangles have weak resistances because they haven't proven themselves yet, but even if they were valid the 13.80 price is above all of them. Its the close of the all gaps and a breakout of all possible triangles. Its a big deal like in the way that the break of 6.55 was a big deal if we can get it. For now I don't see any signs saying we won't get it, we're about to see some serious movement.
Trade closed: stop reached:
Stop at ultimate support of 9.65 was breached. Bearish patterns are forming and price is far in bearish territory. Closed position.