AMC Entertainment stock closed the trading week up more than +30%.
The company stock seems to have bottomed out around $4-$5 key levels.
Fintel is currently reporting AMC’s short interest at 22.02%, which means short sellers continue to short the movie theatre chain.
More than half of AMC’s orders are being moved to dark pools, suppressing true retail demand.
However, the movie theatre stock is currently up +28.75% this year-to-date.
Higher trading volume days has caused shares to rise despite off exchange trading.
Where is AMC Entertainment stock headed next week?
Here are some high probabilities and scenarios.
AMC Stock Bounces from Key Support Levels
AMC Entertainment stock declined more than -70% last year, as most of the market did.
The stock showed major support around the $6 level before getting crushed below $4 towards the end 2022.
Share prices have retested $4 and $5 indicating a clear bounce and bottom for the movie theatre stock.
Volume has risen despite ongoing shorting in the company.
AMC is currently up more than +28.75% in only the first two weeks of the new year.
New investors who purchased the stock in January are currently up this year, but long-term shareholders continue to hold unrealized losses with few breaking even and even fewer still in profit at current levels.
AMC Entertainment, along with GameStop, Mullen Automotive, Meta Materials, and many others, have been targets for big short sellers.
This part of the equation alone makes these companies short squeeze plays.
Will AMC stock go up next week?
Here are a few predictions based on current technical analysis.
Also Read: Why is MULN Stock Going Down?
Will AMC Stock Go Up Next Week?
AMC Entertainment stock will need to break above the $5.13 level to continue its current uptrend.
A break above $5.13 has the potential to take AMC’s share price up to $5.34, then to $5.55.
We are seeing resistance at this level after hours.
A selloff or weak buying pressure at the start of Tuesday’s trading day may take AMC’s share price down to retest $5 and possibly even $4.90.
The stock may go as low as $4.77 if buyers don’t step in.
Does Volume Matter?
Momentum will be the catalyst for AMC, despite the large volume of off exchange trading.
Since approximately 50% of retail’s trades are happening outside of the lit exchange, it means that out of 100 trades, 50 of them are lit.
An increase of 1,000 trades means now 500 trades are lit.
100,000 trades means 50,000 trades are now lit, compared to a low volume buying day of just 100 trades with 50 being lit.
And so on.
Buying pressure matters.
This is why retail investors have always been the biggest catalyst for a short squeeze.
Will the Short Thesis Eventually Change?
The rise of the movie theatre industry is here.
Recent developments have the potential to change the short thesis and enable short sellers to go long instead; closing their short positions.
Changing fundamentals, alliances, and opinions about the movie theatre industry by big players will have a big impact on where AMC’s share price goes in the near- and long-term future.
We want to see AMC’s market cap grow, debt come down, revenue increase, and more money going into the development of new movie titles.
Partnerships and collaborations will demonstrate how the movie theatre industry is a necessary part of the entertainment industry and key to bigger profits in the future, yes, even for online streaming giants.
Would you agree or disagree?
Leave your thoughts in the comment section of the blog down below.
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