AMC Entertainment trades higher in the past month as it breaks major support levels it created last year when the stock soared to $72 per share.
The movie theatre chain had a low of $5.05 in the past 30 days but has now begun trading above $8 levels.
AMC was halted on Wednesday after surging past $8 per share at market open and had a high of $9.15 that same day.
But it seems momentum is just getting started for the ‘meme stock’.
What we’re seeing this Friday is a trend upwards with consolidation, a high indication of bullish sentiment.
This healthy trend may suggest that market makers are preparing to make their money going long after shorting the stock since its all-time high.
And with SPY’s bounce in the market, it could feed that confirmation bias.
Will AMC undergo a massive bounce as the market in general begins to trend upwards again?
And is an AMC short squeeze in 2023 possible?
Let’s discuss it.
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The Market is Shifting
The S&P 500 index has seen better days this year, but the SPY hit a triple bottom around $360 so far and hasn’t come down since.
First in June, again in September, and last in October.
October is the month when SPY began to bounce from this major level of support.
Around the same time, AMC Entertainment stock was having a bounce from its major level of support around $6.30 per share.
I sent out an alert that same month informing the retail community of the buying opportunity.
AMC Entertainment is now up more than 40% since the publication of my ‘buy alert‘ on the blog and newsletter.
Take it from someone who said buy AMC at $6 per share last year before it ultimately surged to $72 per share and crippled Wall Street.
The point I’m making is the market is shifting and it’s very possible we begin to see AMC retrace to higher levels it created last year.
Of course, there are many factors that may break or make this a possibility.
The major one being retail and institutional investors both buying the stock en masse.
Which as we know, usually tends to happen during a bull market.
AMC’s Fundamentals Today will Play a HUGE Role Tomorrow
Institutions were buying AMC stock mainly during the second quarter of 2021 when retail investors sparked confidence towards the upside.
And retail investors haven’t left despite massive shorting in the market.
Based on what we’ve seen in the past, a new all-time high for AMC could very well come to fruition in the next bull market.
The reason behind this observation is that institutions and retail investors were buying AMC Entertainment stock even when the movie theater chain was on its knees.
There was still big suppression from short sellers who did not see any fundamental value in the company.
It’s for this sole reason why more institutions will likely purchase the stock during the next bull run, because AMC has significantly improved fundamentally.
AMC’s fundamentals today are going to play a huge role tomorrow.
It’s just a matter of time before retail investors get to see this play out in real-time.
Will AMC Have a Short Squeeze in 2023?
Granted that we enter a bull market in 2023, it’s very possible AMC has a short squeeze due to excessive buying pressure from both institutional and retail investors.
Fintel is currently reporting AMC’s short interest at 21.64%, which means there are plenty of open short positions that may trigger an AMC short squeeze in 2023.
When AMC’s share price skyrocketed to $72 per share, AMC’s short interest dropped from 21% to 14% due to hedge funds buying back their shares.
And with AMC’s increasing borrow fee rate, it only puts more pressure on hedge funds to begin this process.