AMC Entertainment Holdings Stock Price and Forecast: Why the fall?


  • Meme stocks suffer on Tuesday with some heavy losses.
  • AMC stock loses over 8% while recent favourite BBIg fell 17%.
  • The entertainment giant stock just breaks the key support level at $48.

Meme stocks had a tough day on Tuesday with many of the favourite names suffering some steep falls, as risk-off spread across markets. Most of these stocks are high-beta, meaning they move quite a bit more than the broad market indices. Markets were negative on Tuesday and the mood has appeared to turn negative, so meme stocks took a proportionally larger hit.

Quadruple witching is also happening on Friday and the retail meme stocks have huge open interest options positions, which will be expiring, making them very volatile in the days leading up to the event. For an explainer of quadruple witching see here

AMC 15-minute chart

The AMC 15 minute chart above shows Tuesday's session was weak throughout with little in the way of a bounce. The stock closed nearly on the lows of the day, which is never a great sign. There was talk of a negative report out on the stock from some investing websites, but AMC traders are well used to analysts calling the stock lower and ignore this and focus on momentum, so we do not give that excuse much credence. The backstory and the balance sheet difficulties are well-known. AMC is not for the faint-hearted and not for those looking at long term or value investing. It is a momentum, fast money play.

The stats below show the average wall street price target is $5.44 and has been at that level for some time, so no we do not think a negative report was the reason for Tuesday's sell-off. Rather it was a combination of risk-off mood across markets, some profit-taking from the recent spike, options related hedging ahead of Friday's quadruple witching, and just plain old shorting as the latest data shows the short interest increasing last week.

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
Short Interest 18.7% Refinitiv, 20.41 % Ortex
Average Wall Street Rating and Price Target Sell $5.44

AMC stock forecast

AMC retraced to just below our $48 support. We can say this is a retracement and a potential buy-the-dip so long as the stock does not go any lower. We can try to buy a dip here if the stock opens positively, but so far the premarket is not helping with AMC down another 2% to $46.27. This will end the bullish trend unless something turns around between now and the open. Therefore, we enter the neutral zone, the flag pattern and remain neutral until $40, at the bottom of the flag. Those looking for dips to buy can try the 21-day moving average at $44.08, but we are not very happy with that level and would prefer to wait for $38 to 40 as the volume is higher at those levels. Breaking $30 would put the stock bearish in our view. 

FXStreet view: AMC bullish above $48, neutral $48 to $30, bearish below $30.

FXStreet levels: Buy the dip at $44, stop at $42. Buy the dip at $38, stop at $35. These are wide stops as this is a volatile name, so only risk what you can afford to lose. 

AMC daily chart

 

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