AMC stock has found a new level of support at the $15 level.
We can see this by looking at the 5-day trading chart.
The stock is also now up more than 19% on the monthly chart.
For months now, the ‘ape’ community has been saying that AMC is not done running due how high the short interest is.
So, will AMC’s share price go higher?
Well, there’s a very high probability retail investors will squeeze short sellers this year like they did last year.
Let’s discuss it.
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AMC closes trading week up 6.00%
AMC Entertainment stock closed the trading week up 6.00% and nearly 2% on Friday.
The company’s share price is now way out the money compared to analyst’s price targets.
CEO Adam Aron’s ‘pounce’ message has left Wall Street rather concerned as short sellers begin to take a step back.
We’re seeing a massive return in borrowed shares typically used to short AMC stock.
AMC’s shares on loan have dropped from 195 million to 130 million in only two weeks.
Although AMC’s short interest is still relatively high, the reported SI dropped from 23% to 18.04%.
While AMC’s current share price does not indicate signs of any major short covering, the drop in short interest does signify hedge funds returning borrowed share to their lenders.
Are short sellers getting ready to close their positions in AMC soon?
Well, we know that AMC’s fundamentals have impressively recovered and while it was a screaming short during the pandemic, that just simply isn’t the case anymore.
Movie-goers are filling up auditoriums and titles are breaking record one after another.
This means the largest movie theatre chain in the world is no longer shrinking, but rather growing.
Is AMC stock a buy?
Analysts are hesitant to admit defeat, but with AMC’s recovery, growth, innovation, and increasing retail shareholder base, the stock is certainly a buy.
The market has proven time and time again that the movie theatre industry is not dead.
While it may have gone dormant during the coronavirus lockdown, online streaming simply cannot replace the theatrical experience one gets from the premier of a new movie release.
Whether you buy AMC stock for a short squeeze trade or long-term speculative investment, there’s profit to be made.
Especially if at one point AMC decides to introduce a cash dividend for its shareholders.
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