Tag: GME Squeeze

Analyst: AMC and GME Have Highest Squeeze Potential

Market News Daily - Analyst say AMC and GME Have Highest Squeeze Potential.
Market News Daily – Analyst says AMC and GME Have Highest Squeeze Potential.

S3 analyst says AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME) stock have the highest squeeze potential in the market.

“As the broader stock market has been on a tear for about a month, things are looking grim for investors with big short positions in stocks like AMC Entertainment Holdings Inc. and GameStop.”

AMC’s and GME’s short interest data is what ignited the massive rallies in 2021.

Today, both AMC and GME have a high short interest of 26.69% (AMC) and 20.73% (GME).

AMC’s short interest was only 25% when it surged to its all-time high of $72 per share in June of 2021.

Short interest dropped to 14% as short sellers closed positions only to pick right back up throughout 2022 and 2023.

Both AMC and GameStop shares have been suppressed from rising through heavy dark pool trading and suspiciously through naked short selling, evident in high FTDs (fails-to-deliver).

Two years later and GameStop is finally a profitable company.

AMC Entertainment, the largest movie theatre chain in the world, continues to innovate and creatively raise cash with a mission to erase its debt accumulated during the pandemic.

Hedge Funds Face Big Risks

Ihor Dusaniwsky, head of predictive analytics at financial technology and analytics firm S3 Partners, compiled a list of those most vulnerable stocks, headed by such names as AMC (AMC), GameStop Inc. (GME), Coinbase Global Inc. (COIN) and CarMax Inc. (KMX).

“One factor that is also killing profits for short sellers is the borrowing costs on stocks that no one is willing to part with, and the stock that figures highest on that list is AMC.”

AMC’s cost to borrow recently skyrocketed to more than 1,000% with its cost to borrow average currently being reported at 928%.

“Short sellers want to short the stock, but they are not able to get a stock borrow locate and therefore cannot execute their short on the street,” Dusaniwsky told MarketWatch in an interview.

“But, when any stock borrows become available — lenders, brokers know they can charge inflated fees as there is huge demand for the name.”

“In this case there is an AMC–[preferred stock] APE arbitrage trade that will be profitable if the conversion occurs soon because the high financing costs are eating into those expected profits every day, including weekends,” Dusaniwsky said.

But the S3 analyst isn’t the only one stating there is big squeeze potential in AMC and GameStop.

Related: “The Game is Rigged” Says Ex-Citadel Data Scientist

Strategist Says Mother of All Short Squeezes is Here

Market News Today - Analyst: AMC and GME Have Highest Squeeze Potential.
Market News Today – Analyst: AMC and GME Have Highest Squeeze Potential.

Interactive Brokers Chief Strategist Steve Sosnick says there’s big demand to short AMC Entertainment stock.

He says the biggest reason aside from the company’s fundamentals is its new merge with its equity (NYSE:APE).

“It’s very hard to keep the momentum in these things because economic reality does take hold.

Bed Bath & Beyond, at one point was the best performing stock on the board until reality set in and they began defaulting, averted bankruptcy, but using a deal that is so dilutive that it’s unavoidable.”

Sosnick says AMC is in a very special situation because of the proposal to merge APE with AMC common shares.

“Right now we’re seeing such a demand to short AMC partly because of its difficulties but partly because of the special situation.

This really is what they were looking for in some ways as the mother of all short squeezes.

The borrow rate, it costs you 700% to borrow the shares overnight — if you can find them,” said the Interactive Brokers Chief Strategist on Yahoo Finance.

Market News Published Daily

Market News Today - Is Amazon buying AMC Entertainment?
Market News Today – Analyst: AMC and GME Have Highest Squeeze Potential.

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GME Stock Sees a Massive Increase in Trading Volume

Stock Market News Today: GME Stock gets halted during surge.
Stock Market News Today: GME Stock gets halted during surge.

GME stock saw a massive increase in trading volume on Monday when the stock jumped to nearly $35 per share.

The surge came after S3 Partners CEO announced GME stock could go parabolic if it rose to $30 per share.

GameStop was halted twice on Monday after the market opened and has slowly trended downward since.

The stock was forced to lose its momentum despite the heavy trading volume seen early in the trading day.

GameStop’s volume surged nearly 5 times its average trading volume on Monday but was prohibited from surging.

GME Stock Halt October 31, 2022.

Retail investors are calling S3 Partner’s announcement a setup, or trap to burn shareholders.

But Wall Street can easily create a big sell order in the market despite of heavy volume from retail, the question here is why not go long with them?

Last year, GameStop and AMC shareholders were able to inflict hedge funds who were betting against the two companies with billions of dollars in losses.

Are retail and hedge funds at war with one another?

It certainly seems so.

Is a GameStop Short Squeeze Likely?

GameStop short squeeze

Despite the market advantages financial institutions have over retail investors, large continuous volume over a period of weeks could trigger bigger price action for GME stock.

One-day rallies of heavy buying volume isn’t enough to combat market makers.

Like last year, it’s going to take continuous buying pressure to compound the momentum that will likely result in a GME short squeeze.

But I’d love to know your thoughts on the matter.

Leave a comment down below.

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How Close Are AMC and GameStop to Squeezing?

AMC and GameStop Squeezing
What will take AMC and GameStop to squeeze? And how soon will this happen?

AMC and GameStop seemed to begin squeezing in late March before being halted.

Both these stock’s short interest has not changed which means shorts have not closed their positions.

AMC and GameStop are both down 10%-20% on the five-day chart.

Volume has also significantly dropped during this bear market, which is normal.

Let’s break it down together.

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AMC and GameStop are overdue for massive price action

AMC and GameStop

If there’s one thing we’ve learned from both AMC and GameStop over the last year, it’s that they move in very similar ways.

Both these momentum stock have very similar short interest data as well.

AMC SI: 20.59% | Utilization: 100 | Shares on loan: 136.54m

GME SI: 21.63% | Utilization: 100 | Shares on loan: 20.14m

(Short interest updated daily here)

The biggest and most notable difference here being the number of shares on loan.

The short interest essentially shows us the percentage of the float that is being shorted.

We can see that millions of shares have been on loan.

These shares have to be bought back or returned at some point.

And when they are, it’s going to cause AMC and GME to squeeze.

Because we are in a bear market, it’s more likely we will see shorts close as we transition towards a bull market.

But more on that below.

Trading volume

AMC and GameStop began squeezing after trading volume surged more than 3-4 times their average volume.

The trading halt, which lasted no more than a few minutes became a lifeline for short sellers who would have been squeezed from their positions.

The two stocks saw massive price surges in late March when the market opened.

That same week we saw dark pool trading volume surge as momentum skyrocketed in both AMC and GME stock.

Since the halt, AMC and GameStop’s share price and volume has dropped, essentially erasing gains from the previous moves.

Was this market manipulation?

Several retail investors seem to think so.

The halts prevented both AMC and GameStop from squeezing shorts out of their positions.

AMC topped $34; GameStop topped $199 only moments before trading was halted.

But this halt was only meant to keep these stocks in line with the rest of the market.

Things are going to change very drastically as we re-enter a bull market.

Squeezing shorts is only a matter of time

The best approach to squeezing shorts from their positions seems to be more of a long-term strategy now than it was back in January of last year.

Both AMC and GameStop have established new grounds to work with.

We saw this happen with Tesla as it too was heavily attacked by short sellers at some point.

Tesla’s growth accumulated over time despite the heavy short selling.

Its highly likely we see a similar trend occur with AMC and GameStop.

Is there a short-term scenario where shorts get squeezed from their positions?

Absolutely.

I believe that as we re-enter a bull market, small and midcap companies will surge, enabling current shorts to close their positions.

And as traders begin to shift to call options, I expect massive price runups to go into full effect.

Institutions and traders are currently hedging against their positions in the market with puts.

This is just something bulls will have to weather out for now until the market becomes bullish again.

And you’ll see that these switches are very common in the market.

Bear markets don’t tend to last as long as bull markets.

The average bull market lasts anywhere between 973 days to 2.7 years according to Forbes.

They’ve also occurred for 78% of the time in the past 91 years.

We hodl.

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