Today I’ve collected data from Ortex and compared patterns from the runups in January and June of last year.
And the data shows the time for another massive AMC price runup is on the horizon.
AMC’s price has dropped since its runups last year, but the short interest data is showing clear signs the stock is preparing for a big move.
The ‘apes’ haven’t been wrong, and this just could be one of the community’s biggest wins.
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AMC price runup history
On Monday, January 25th, 2021, AMC’s share price opened at $4.71 and reached a high of $20.36.
On Monday, May 31st, 2021, the share price opened at $31.89 and reached an all-time high of $72.62.
Retail investors have said that AMC’s third runup will be even more violent than the previous runups.
These previous runups were only 4 months away from one another, so why didn’t we get a third runup in September/October?
After going through the data one key data point shows how shorts have been able to refrain from closing their positions.
And it has to do with the CTB (cost to borrow).
So, we’ll start here.
AMC cost to borrow
AMC’s high cost to borrow incentivized short sellers to close their positions in January and in May of last year.
In the data above you can see that prior to any runup, the CTB went up, making it expensive for short sellers to borrow stock to short.
When the CTB went down in January, that’s when we see AMC’s price surge.
We see the same pattern in May where the cost to borrow had gone up again before coming back down, resulting in the stock surging to $72 per share.
Today we’re in a phase where the CTB has come down and stayed down for quite some time.
However, that CTB is very slowly but gradually going up.
Does that mean the cost to borrow is the biggest key for another price runup?
Not exactly, but the data shows that it played an important role in incentivizing closing short positions.
I update AMC’s cost to borrow daily here so be sure to bookmark it and check on it daily to see how it’s moving.
The second pattern investors should keep an eye out for is the days to cover (DTC).
AMC days to cover
Right before AMC’s price runup to $20 and $72 per share, the data shows us that the days to cover went up before coming back down where the price surged.
Today we’re seeing the days to cover have been going up longer than the previous runups.
What investors are going to want to keep an eye out for is for this number to start coming down again.
The DTC began to climb, then dropped right before AMC’s share price started to surge.
AMC is currently in the process of the climb.
But one of the biggest signals in the data has been the utilization.
AMC’s utilization tells investors how much of the float’s shares are being borrowed.
And in AMC’s case, it’s all of them again.
Let’s discuss it.
AMC utilization point towards next runup
After AMC’s price runups last year, the utilization dropped and continued to drop.
The utilization didn’t reach 100 again for months.
One common denominator AMC’s price runups had last year is they both had utilization reach 100 before the stock surged.
AMC has been holding that utilization rate of 100 for weeks now, longer than the previous episodes.
I wouldn’t be surprised if we see the utilization drop some points and then come back up because that’s what happened in January and May/June of last year too.
AMC’s utilization is one big data point telling us another massive price runup could be underway.
Now I want to take a look at the shares on loan because it’s going to provide further data and confirmation as to why ‘apes’ have been right for quite some time.
‘Apes’ have always been right
Mainstream media won’t talk about this.
The Fool, MarketWatch, Benzinga, and The Wall Street Journal will not tell you that AMC is a short squeeze play.
But the data says otherwise.
In the chart above we can see that the shares on loan began to climb up prior to January’s runup and again prior to May’s runup.
AMC’s shares on loan consolidated upwards for months before dipping and ultimately coming back up again.
Today we can see AMC’s shares on loan are greater than they were back in January and are coming close to those in May/June.
All this tells us is millions of AMC shares are being loaned out to short the stock.
These shares have to be paid back.
And once they are, we can expect to see the shares on loan fall sharply like we did in January and May of last year.
This continuous surge in loan sharing only validates AMC is a short squeeze play.
One thing I want to mention is that AMC’s price runups saw a lot of volume right before they surged.
The reason they saw a lot of volume is because AMC began to move up little by little enticing new investors to jump in.
We can expect to see this wave of FOMO buyers again during AMC’s third price runup.
Will this third price surge be bigger than the previous two?
I think we have to look at AMC’s shares on loan.
AMC had a lot more shares on loan during the May runup than it did in January.
Today, AMC’s shares on loan are a lot closer to those from May.
It’s true, the longer shorts hold off on closing their positions, the bigger the price runup will be when they close.
And that’s simply because of the shares on loan they’ve accumulated throughout the months.
One thing is certain, another massive AMC price runup is inevitable.
What do you think?
Leave your thoughts below.