- AMC has been weaker than indices of late.
- AMC down 15%, GME down 14% on Monday.
- Both recovered on Tuesday, but seems like dead cat bounce.
AMC stock recovered some of Monday's major 15% loss on Tuesday. The movie theatre chain fell sharply on Monday as declining momentum hit the meme stock space. Risk aversion does tend to affect high beta names as the year end approaches. Traders, investors and fund managers are more guarding as final performances are determined. 2021 has seen a strong rise in retail investor participation, so it is unclear how this cohort reacts during the holiday season. Early signs are similar to the rest of human nature.
Risk aversion appears to be rising as distractions mount. Both AMC and GME have been falling steadily for the past week with little participation in the rally on Friday. GameStop managed a paltry 2% gain last Friday, while AMC was actually in the red. This was a recovery day for global stocks markets with the S&P 500 making more all-time highs.
Tuesday at least saw some recovery in meme names with both AMC and GME up on the day. This was more impressive given that the main indices closed in the red. Wednesday is Fed day, so until then it will be a case of more risk aversion. Expect meme stocks to fall in premarket and early trading.
AMC stock news
Continuing uncertainty over the Omicron variant can be cited as a strong concern for AMC. The latest data from South Africa shows that while cases may be mild, hospitalization rates have now begun to rise sharply after an initial lag. Any lockdown would have a disproportionate effect on AMC as opposed to GME. AMC needs economies to remain open. Already restrictions are being increased in the UK and parts of Europe. Further negative sentiment resulted from sales by AMC insiders last week, which was well-publicized. Both the CEO and CFO sold shares in AMC last week.
AMC stock forecast
Breaking $30 was the significant level here for AMC. This resulted in a six-month low and taking out the 200-day moving average. There is a volume gap from $30 until $20. We do not see any key support in the interim, and the overall picture is strongly bearish. We have a declining RSI and MACD, a stock below all major moving averages, and now too below the yearly VWAP. $30 to $32 is key resistance. Unfortunately, we know most readers are likely bullish, but below $30 we see more losses likely. There is a volume gap until below $20.
AMC graph, daily
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