- AMC Entertainment has brought back $5 on Tuesdays to boost ticket sales.
- AMC shares have been supported for two months by an uptrend line.
- CEO Adam Aron led the charge with a tweet about a short squeeze coming.
AMC Entertainment (AMC) stock. started Friday down 1% at $14.34. This is actually a positive sign after AMC’s impressive rally in the previous session. AMC stock exploded 15.2% Thursday to close at $14.48. The main spark for the fire was caused by CEO Adam Aron hinting at a short squeeze coming. AMC’s stock was helped by news that GameStop ( GME ) was attempting a stock split, and when one meme stock goes up, others often aren’t far behind. AMC also announced a date for its next quarterly earnings presentation.
Read also: Apple stock plunges: AAPL price target to $100 on 2023 earnings decline
AMC Stock News: A Short Squeeze Coming?
AMC CEO Adam Aron I led much of Thursday’s rally with a tweet:
I keep getting asked “Wen pounce?” Know this: 1. I always keep my word. 2. I have said publicly that a raise would not happen before Q2 2022 earnings are announced. 3. Press release issued today that Q2 earnings will be announced on Thursday, August 4th. Read between these lines.
— Adam Aaron (@CEOAdam) July 7, 2022
This actually turns into a comment from to during the May 9 earnings call: “We’re constantly exploring smarter ways of doing things, and I promise you we’ll jump, but only when the time is right.” Most observers see this as a crackdown on short sellers to drive up the stock price by buying large amounts of short-dated call contracts together.
So there you have it, folks. of Short put AMC shares it’s coming, but not until August 4th. Could this be the MOASS (Mother of All Short Squeezes) of history that Reddit gangsters have prophesied?
GameStop announced midweek that it will undergo a stock split later this month. The video game retailer, which alongside AMC was huge WallStreetBets pump in January 2021 that led to the collapse of hedge fund Melvin Capital, will give shareholders four shares for every share they hold at the close of trading on July 18. Because stock splits make it easier to buy calls (call contracts are sold in groups of 100 shares), GME’s stock split should make it easier for retail traders to buy calls and thus produce more extreme brief contractions. As of mid-June, AMC and GME had about 22% of their shares shorted.
of stock split the news helped GME shares up 15.1% but surprisingly AMC rose even more on Thursday to close up 15.2%. The only reason for this seems to be that the same traders bullish on GME are also bullish on AMC and decided to make it a “double”.
The only other news published by AMC Entertainment on Thursday it would schedule the fiscal second quarter for after the market closes on Aug. 4. Wall Street is forecasting an adjusted earnings loss of -$0.19 per share on revenue of $1.18 billion.
AMC shares has also brought in $5 Tuesdays to boost attendance. Although it doesn’t apply to certain premium offerings like IMAX, $5 Tuesdays tend to bring in large numbers of otherwise infrequent customers.
AMC stock forecast: Resistance around $20
AMC shares has been riding an uptrend line that started on May 12 nearly two months ago. For what it’s worth, that’s impressive. It shows that there is enough confidence in this beleaguered name that they are piling up shares (buying the dip). The divergence of the moving average convergence has also led the signal line (orange) since May 18. These are two very positive details. The third piece of optimism comes from the rise of the MACD above the zero threshold. This evidence is enough to make me believe that an even bigger rally is in the works (but maybe not until August 4th!).
There remains a supply area from $19.34 to $20.96 which should provide resistance if AMC shares does it in your neck of the woods. This price region was stubborn during February and March.
AMC Stock Daily Chart
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