# How I Plan to Trade AMC

Canonical: https://tradersdailydirection.com/how-i-plan-to-trade-amc/

In yesterday’s issue of [**_Traders Daily Direction_**](https://tradersdailydirection.com/why-i-bought-more-tesla-stock-on-friday/), I showed you how I’ve been trading the move in **Tesla, Inc.** (TSLA) stock.

This is one of the more volatile stocks out there, so I decided to scale into a position with two separate entries.

I made my first half-sized entry as the stock was beginning to break out of a multi-month consolidation period.

And I made my second half-sized entry as the stock began tightening up again after its initial surge.

I ended up with a slightly higher average cost on this trade by scaling in at a higher price on the second entry…

But given the stock’s volatility, I didn’t want to buy a full position all at once and take the risk of the stock moving against me.

In other words, paying a slightly higher price overall was worth it to avoid the extra risk.

And that brings me to my trade in **AMC Entertainment Holdings, Inc.** (AMC), another _highly_ volatile stock, which I first told you about in your [**Aug. 19 issue**](https://tradersdailydirection.com/the-mother-of-all-meme-stocks/).

## **My Trade in AMC**

After a big run up in price during the first half of 2021, shares of AMC consolidated and gave me a low-risk entry point.

You can see my initial entry in the chart below. I bought a small pilot position near $37.00, and I set a stop at the bottom of the consolidation range at $28.85.

![](https://lh5.googleusercontent.com/YY8RZuOTCgb7oyw7WdjXxLbc_2rgUl3Hyo6fWc6ovj_RtpOZZ89wZBFALKGZa_G07frg20vqIYvAzAxWmjIlhSkw3wI2Zm8SabrmvdWLfy8D2mD5i0JNp3uTNWm64obveA=s0)

**_Daily Chart of AMC Entertainment Holdings, Inc. (AMC) with Initial Entry & Stop -- Source: TradingView_**

A few days after my initial entry, the shares began to surge. AMC was up 30% in just a week.

But I didn’t get the huge follow-through move I was hoping for.

Shares began to roll over and are now back near the original breakout level around $37.00.

But price action is once again getting quiet.

This is a good sign. It means that volatility is calming down, and we could get a new entry point.

Volume has also been well below average for the last several trading days.

[**This is often an indication**](https://tradersdailydirection.com/how-volume-tips-me-off-to-surging-stocks/) that sellers are drying up and the stock has been concentrated into stronger hands, or “diamond hands” as the Reddit crowd would say.

## **What the Chart Tells Me**

When analyzing a stock chart, I like to use my imagination…

This helps me to visualize what I expect to happen and plan my attack.

![](https://lh3.googleusercontent.com/dnOUwkn9CUP5vCzpxdKyIk_jJpV5Mcs_4HQlmYjwSvUc5ij2XvDm3yv26ukBXU1FQGfkEeMwRH9Ox4NMLfD21RDVV8Cc6CLdYzNI_HjLkULdcWmGQ0qCDmE10JGed_RukA=s0)

**_Daily Chart of AMC Entertainment Holdings, Inc. (AMC) with Expected Move & Volume -- Source: TradingView_**

As you can see, I’ve drawn out the setup above.

While there are no guarantees in the market, this is what I would love to see happen over the next week or two.

If price continues to tighten and volume stays low, I will be looking to [**buy on a fresh breakout**](https://tradersdailydirection.com/the-four-big-breakout-commandments/) near the $42 area.

Of course, anything can happen…

If AMC breaks down or gaps way up, I’ll sit on my hands and wait for a new opportunity.

But for now, this is my plan of attack.

I’ll be sure to keep you posted as the setup develops further.

Embrace the Surge,