AMC Entertainment Holdings Stock Forecast: Bulls looking to $53.20 targets


  • AMC breaks $50 for the first time since July.
  • The entertainment giant surges despite major indices falling on Friday.
  • A new advertising campaign kicks off featuring Nicole Kidman.

Update, Tokyo: AMC added a further 3% on Monday and the stock is elevated on the back of  Shang-Chi's continued strong box office momentum. Disney's announcement to debut the rest of its 2021 films exclusively in theatres has been a strong benefit for investors also.

The latest readings of US inflation data will be the next fundamental from an economic standpoint as traders weigh the risks to stocks associated with timings of the Federal Reserve's tapering time frame. 

From a technical standpoint, the -272% Fibonacci retracement of the current correction falls in at $53.20 as an upside target from the close of $51.69 and the day's range between $50.35 and $52.79 the highs. On the downside, $51.10/50 is a support area guarding $49.50 and $48.30 daily highs.

End of update

AMC stock put in a very strong session on Friday, rallying and closing above $50 for the first time since July. The stock has been strong since August 24, when it broke out of its range trading zone and pushed into the $40s. Since then, AMC consolidated and eventually broke the next key resistance at $48, which attracted in more buyers with a Fear Of Missing Out (FOMO) effect helping the stock.

This FOMO effect may be written off by many as a new "fad" – or symptomatic of younger retail traders – but momentum has always been followed closely even by seasoned market watchers. Fear of missing out is a human trait. Every day mainstream publications and news channels will carry the biggest stock market winners and losers, this is momentum. Options volume remains high, with calls being nearly 70% of Friday's options volume in AMC up from 68% on Thursday.

Further good news came over the weekend with Disney (DIS) announcing that the rest of its slated film releases for 2021 will debut exclusively in cinema theaters and not online. Disney+ will show the films after a certain exclusive period in cinemas. Streaming is obviously a major threat to cinemas and recent developments from Disney had appeared to indicate that cinema and streaming releases would happen simultaneously. This is surely another positive for AMC in our view.

AMC 15 minute chart

 

AMC key statistics

Market Cap $25.7 billion
Price/Earnings  
Price/Sales 3
Price/Book  
Enterprise Value $36 billion
Gross Margin -0.74
Net Margin

-3.15

52 week high $72.62
52 week low $1.91
Average Wall Street Rating and Price Target Sell $5.44

AMC stock forecast

The flag breakout we can see below continues perfectly. Breaking $48 was taking time and beginning to make us doubt the move, but the AMC apes got the job done eventually. With option volume increasing and call options being 70% on Friday's volume it looks like the move is set to continue. The Disney news mentioned above is definitely bullish for AMC and Nicole Kidman is now going to be on the case helping to keep the profile high. 

The next target is near $60 as the volume is relatively light until that zone. This is the consolidation zone from June. The momentum oscillators are trending higher with price and so confirming the move. AMC needs to hold above $48 and can even retest it and remain bullish. 

Bullish above $48, neutral $48 to $40 and bearish below $40. Buy-the-dip zones at $48 and $46 from the 9-day moving average.  

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