AMC stock continues to see more interest on social media on Monday as the stock seeks to build on the strong performance of last week. Not only AMC, but also GameStop (GME) as the meme stock space exhibited strong gains for the last week. While AMC's gain of 28% last week certainly looks impressive, GME stock more than doubled that at 67% up on the week to maintain its meme king status. This week looks set to continue the theme of risk returning, especially in the high-risk meme stock space.
AMC Stock News
CEO Adam Aron tweeted over the weekend that more deals are on the way in the meme stock space after the success of the Hycroft Mining (HYMC) deal. AMC entered the world of gold mining with a small investment in Nevada miner Hycroft Mining just two weeks ago. This once small-time gold miner with financial difficulties hit paydirt last week as it managed to raise $139 million via share placing.
In response, HYMC shares rallied over 20% in after-hours trading. Now, Reuters reported that in a phone interview from his limo on the way to the Oscars, Adam Aron said more meme stock deals are possible as the movie chain looks to become an investment vehicle of sorts.
"I'd like to think there will be more third-party external M&A announcements going forward where AMC can reach for the stars and intriguing investments that have potentially attractive returns," Aron told Reuters. "While the Hycroft investment is pretty far from home, it does rely on a core competency of our company to understand balance sheets, raising cash and solving liquidity problems."
The last statement probably hits the nail on the head. Aron has become expertly skilled at tapping into the trend of the moment and endearing himself to retail traders. This has earned him a large following and allowed AMC Entertainment to raise cash from retail investors, which certainly helped AMC to avoid bankruptcy during the pandemic.
AMC Stock Forecast
Starting with the 15-minute chart this time to give us a bit of short-term focus, the $18 level and above is key to hold due to the volume gap underneath. Breaking lower will see a quick move to $16 and below.
On the daily chart, we still need to cleanly break above the $21.04 resistance and close above it. Doing that will then open up a move to $26.92. More importantly, it ends the longer-term bearish trend. This may then attract CTA and trend-following funds into the trend's formation or at least stop trend-following sell programs. Now I am bearish on AMC stock from here and am long some puts. I know some of you will not like to read that, but it is a longer-term view. I tend to trade from a fundamental macro backdrop, and I see trouble ahead for the stock market. AMC should hold up in the short term, but longer term I am not as confident. If AMC apes manage to close above the resistance level at $21.04 that I mentioned, then I might close the position.
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