AMC stock surged to $4.92 closing up +21.18% on Wednesday.
No major catalyst moved the stock, though trading volume did exceed almost twice its average volume of 26 million.
The movie theatre chain stock demonstrated strong bullish price action today, did AMC stock just bottom out?
Analysts at TipRanks gave AMC Entertainment stock a price forecast of $4.50 at its highest on a 12-month period but AMC blew those estimates fairly quickly.
The stock is having a bounce after it’s hit the $3.80 levels for the past few weeks.
Technical analysis shows us a break above $4.96 will take AMC stock up to retest $5.30.
#AMCSTRONG and #AMCtothemoon are trending on Twitter as shareholders rejoice from the bullish price action.
Will the movie theatre chain company be able to maintain this momentum?
Let’s discuss it.
Why is AMC Stock Going Up?
It’s very likely AMC has bottomed out and is beginning to bounce back up.
All this means is we’ve identified a key level of resistance for the movie theatre stock around $3.80-$4.00 levels.
There’s another strong demand zone around $5-$6 levels, the same ones we saw in 2021 before massive buying pressure took share prices up to $9 then $14 per share.
Analysts fail to familiarize themselves with the events, catalysts, and community that was able to drive big volume into AMC stock.
AMC stock was never meant to be a fundamental trade for the majority of retail investors, another key point that analysts fail to recognize.
Massive buying volume and the closing of short positions is all a stock needs to skyrocket to unprecedented numbers.
Of course, short interest must be high enough to fuel additional buying power.
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AMC Stock At A Glance
Out of nearly 4,000 market participants, 93% said they are or will still be holding AMC Entertainment stock in 2023.
Majority of shareholders might be down significantly, but investors continue to buy company shares that are heavily shorted.
AMC’s current short interest is now at 22%, per Fintel.
Heavy buying pressure took AMC’s share price from $5 to $9 and then to $14 before getting out of hand for short sellers.
Around the same time, AMC’s short interest was also at 22%.
As share prices rose to $72 per share, we saw AMC’s short interest deflate to 14% before slowly climbing back up again.
Is history about to repeat itself?
The recipe for a short squeeze is certainly there.
But investors must be warned to never invest more than they’re willing to lose.
And while shareholders are anticipating a new all-time high during the next run, it’s also important to consider creating a ‘take profit’ exit strategy.
Seeing massive gains and then letting those profits turn into losses is a hard pill to swallow for most investors.
Always have a plan.
Related: How to Buy AMC Stock (2023 Guide)
Is Now the Time to Buy AMC Stock Again?
All signs are pointing out to an AMC bottom and shareholders aren’t leaving.
If we continue to see a bounce continuation, it could signify the movie theatre stock is making way for the next leg up.
Value investors could take advantage of any major price action that may come of it in the short term.
Otherwise, holding out for a potentially large short squeeze could prove to be rewarding in the long run.
But I’m curious to know what you think.
Is AMC on the verge of squeezing short sellers from their positions soon?
Leave your thoughts in the comment section of the blog down below.
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Everyone seems to be too focused on the cost per share after the reverse split thinking the squeezes floor price won’t increase at all. If you believed in AMC’s market cap at 517,000,000 shares times lets say $1000 per, why don’t you believe in 51,700,000 shares times $10,000 per share? Stick to your convictions people and don’t let FUD get the better of you.
Having bought 25k at average 1.74 then selling at 62.16, I had more than enough gains to buy back 100k at 3.92. I see the stick going to 18-20 usd before April
It’s been the wose I spent thousand of dollars and one.platform I lost all my money to.margin but I still hoping for a squeeze at lease I could get bck some of what i.have lost.very post off
In the hole now…. Going all in at the current price. Most of my shares were bought at $9 and $12. Still strong belief AMC will exceed expectations.
I think we are screwed at least a lot of us that bought in the 50’s and up .
No way will we see those numbers again. After the reverse split that would mean we need a price of $500.00. I am so hurt inside, that i believed in this play. I know I am not the only one , I know there are people that took loans out to get in this play. How sad that the CEO doesn’t care about RETAIL who saved his company.
They should not have taken out loans. That is not Adam’s fault. $500 is very possible. Tesla got over $1k a share with a billion share float. with a float of 140 Million $10k a share is well within the realm of possibility
Let’s start a conversation! Leave your thoughts below.