AMC Networks Inc. owns and operates various cable television’s brands delivering content to audiences, and a platform to distributors and advertisers in the United States and internationally. The National Networks segment owns four nationally distributed entertainment programming networks comprising AMC, a television network that focuses primarily on story-telling under Something More brand name, which comprises films that are licensed from various studios; WE tv, which showcases original and programming series, and feature films; IFC, a network that creates original comedies under Always On. Slightly Off brand name and offers films from various film distributors; and Sundance Channel, which showcases original scripted and unscripted programming series. The International and Other segment operates a network of 9 channels in 16 languages across 24 countries focusing primarily on AMC in Canada, and global versions of the Sundance Channel and WE tv brands.
Take a look at the 1-year chart of AMC (Nasdaq: AMCX) below with my added notations:
Over the last 6 months the AMCX seems to have formed an inverse head and shoulders pattern (green). I have noted the head (H) and the shoulders (s) to make the pattern more visible. The stock’s neckline resistance is just under the $66 level (red). AMCX would confirm its H&S by breaking through the neckline.
Lastly, keep in mind that simple is usually better. Had I never pointed out this inverse H&S pattern, one would still think this stock was moving higher simply if it broke through the $66 resistance level. In short, whether you noticed the pattern or not, the trade would still be the same: On the break above $66.
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The Tale of the Tape: AMCX has formed an inverse head & shoulders pattern. A long trade could be entered on a break through the $66 level, preferably on an increase in volume.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
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