AMC stock is up more than 2000% year-to-date. People continue to wonder why AMC talks continue to pop up everywhere.
The AMC community has grown immensely since the start of this year. Retail investors discovered data that would allow them to make massive gains from simply buying the stock and holding it.
The SEC just released a report confirming what has driven GameStop’s share price up and how we’ll know when shorts begin to cover; more on that later.
The first wave of retail investors are up significant amount of money from getting in early, a few from the second wave are beginning to break even, with another percent finally seeing profits.
With AMC currently trading in the low $40s, third wave investors that get in now could experience significant gains on AMC’s next major runup.
Welcome to Franknez.com – I’ve been discussing AMC’s data since early February. If you missed the runup twice already it’s not too late and I’m going to discuss why.
Let’s get started!
Some of you have told me you saw my AMC articles early this year, dismissed them, but luckily got in right before the push to $70 per share.
Others had the same experience but got in a lot higher.
If you’re holding losses at the moment I think it’s fair to say, for some of you, that it was due to negligence. Negligence of information, correct?
But it doesn’t matter because some of you second wave investors are finally breaking even, with a few even profiting again.
You see, AMC stock has the perfect setup for another runup and a lot of people are going to miss it, for the third time!
But not you.
And I believe this third wave could cause the big one to come to fruition.
We’re going to take a look at where AMC is now, and what we can learn from the SEC’s new report regarding GameStop’s runup back in January.
AMC’s Momentum Just Only Started
The momentum we’ve seen with AMC stock has merely been a statement. A statement that said, “hey look over here, check out this data before it’s too late”.
The runups AMC has had, brought attention to the data. This data tells us massive change is going to occur in the lives of those who hold these golden tickets.
A lot of what’s occurring in the markets is quite complicated, but in short, retail investors are taking this opportunity to squeeze hedge funds betting against the movie theater chain from their short positions.
Squeezing these players out of their short positions would create what’s known as a “short squeeze”.
A short squeeze would create so much momentum that AMC’s stock price would skyrocket to unprecedented numbers.
The Stock Is Not That Far From Its New Bottom
The AMC community created a new bottom for AMC stock. After several price moves, it seems AMC has found a new bottom in the mid to high level $30 range.
If you added to your position when the price was around $36 last week, then you’re already seeing gains the start of this new week.
AMC is not that far from its new bottom which means it has a lot of upside potential from buying pressure alone.
As momentum buyers continue to apply pressure against short sellers, AMC’s stock price will continue to move up past $50, $60, $70, and beyond.
As AMC establishes higher highs and higher lows, we also raise AMC’s bottom.
So where the current bottom is in the mid to high $30s, a new bottom could easily establish itself in the $70s-$80s after the next major runup for example.
How high this new bottom gets raised would depend on how high the next runup goes.
We’ve seen this type of price move with Tesla as it continued to set higher highs and higher lows.
But with that being said, at the rate the AMC community is growing, the momentum and buying pressure is (without a doubt) there to grow AMC’s market cap.
Will This Third Runup Squeeze Big Shorts?
Hedge funds have been losing billions of dollars all year from overleveraging their short positions in both AMC and GME stock.
It’s very possible a third runup forces big shorts to close their positions to refrain from losing even more money.
In this instance, the short interest would plummet and AMC’s share price would skyrocket.
This of course would depend on how big the momentum carried out by retail is.
The SEC confirmed in a report how important buying pressure was to squeeze GameStop short sellers earlier this year. More on that below.
One thing is certain. Early third wave investors along with long term holders will be up significantly in gains as the buying pressure increases.
Late third wave investors could very well partake in the short squeeze event as short sellers rush to close their positions during the next AMC runup.
This third wave of momentum is not necessarily coming from new FOMO buyers but mainly from the AMC community who’ve been buying and holding the stock for months now.
Additional momentum from FOMO buyers will only add fuel to the rocket.
In the recent SEC report, they back up how intense momentum can increase the price of a particular security, I’ll go over that in just a moment.
Should You Buy AMC Stock Today?
We’ve discovered the secret hedge funds feared we’d discover. And it’s the power of community.
AMC has a massive community made up of millions of retail investors who are buying and holding the stock until a massive short squeeze is triggered.
This means the community is periodically buying the stock but also holding it, as momentum continues to push the stock price upwards.
Whether you decide to buy and hold AMC stock for a short squeeze play or for profits, be sure to do your research first because patience eventually ends up paying off.
How Will We Know When AMC Squeezes?
The SEC just released a report detailing the events that occurred in January regarding GameStop’s massive runup.
They mentioned that one thing they noted, was that GameStop’s short interest decreased during the time the share price had increased drastically as it began to squeeze shorts from their positions.
This confirms to us just how important the short interest is in this short squeeze play.
In that same excerpt, the SEC confirms that volume was a significant factor that triggered shorts to cover their positions in GME.
What differentiates AMC from GME is that GameStop’s short interest continued to go down after it’s runup, while AMC’s short interest actually increased.
This means that these AMC price moves have been solely from retail momentum.
Shorts have not covered AMC and it’s for this reason that AMC will continue to climb up until shorts tap out like they did with GameStop earlier this year.
Now, GameStop still has juice left to keep running up. It’s current short interest is at 11% where AMC’s is at 17%.
But it’s all in the hands of retail investors at the moment. And as long as retail investors continue to buy and hold the stock, the price will continue to surge based on demand alone.
Here’s Why AMC Will Keep Surging
What triggered GameStop’s massive price increase was a combination of retail buying pressure that led up to many shorts covering their short positions.
We saw this as GameStop’s short interest fell from 100% to where it’s currently at today.
AMC’s short interest has only increased which means now is the perfect time for retail to conjure up a buying storm if a short squeeze is to be triggered now.
Although AMC does not have the short interest GameStop did back in January before it squeezed, AMC’s short interest is leaning closer to 20% which is still categorized as “extremely high” short interest.
You can view the short interest as being the juice to the squeeze.
AMC’s amazing runups have all been merely from proud AMC shareholders fighting against short sellers.
And we’re not going anywhere until they’re squeezed.
How To Trade A Short Squeeze
A short squeeze requires short squeezers to go long, which majority of the AMC community has done.
A candidate with more than 10% short interest has enough short sellers to create a short squeeze.
AMC’s short interest is coming up to 18%.
The only thing stopping AMC from squeezing at the moment is massive buying pressure.
The people who miss out on this short squeeze play will be those who do not get in on this historical play right now.
Because as soon as short sellers are triggered to close in masses, it would have been too late to participate in this short squeeze play.
Will You Miss AMC’s Short Squeeze?
AMC stock is up more than 2000% year-to-date. Mind you this is without a short squeeze and with the short interest increasing all year.
GME is up more than 900% year-to-date although it used up majority of its 100% short interest earlier this year.
An AMC short squeeze is inevitable and the gains will be immense. The question is, will you be a part of it or will you miss it for the third time?
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