AMC Entertainment Holdings Price Forecast: AMC surges on triangle breakout, targets $14.54 and $20

AMC has done it again and in the process is stealing the GameStop crown. Supposedly a movie about the whole GameStop saga is in the works, but if AMC has its way it will be stealing the show. Coming to an AMC theatre near you: "AMC to the moon".

AMC closed Thursday at $12.77 for a nice gain of 23.7%, thank you very much.

---

Stay up to speed with hot stocks' news!

---

AMC stock news

In the unlikely event you are not aware of the back story, here is a little recap of the story so far. AMC is a global cinema chain and, as a result, has struggled during the global pandemic as most of these cinemas have been closed for the better part of a year. The company narrowly avoided bankruptcy through the interest of retail traders. By strongly backing it, these retail traders allowed AMC to raise capital and debt, meaning it could survive the pandemic. 

AMC announced results on May 6. 

EPS was $-1.42 versus a forecast of $-1.26. Revenue was $147.4 million versus a $153.6 million forecast. The CEO Adam Aron thanked the new wave of retail investors for essentially saving the company and made a donation to the Diane Fossey Gorilla Fund as r/wallstreetbets call themselves apes and have been donating to this cause in large amounts. A brilliant and wonderful side effect of this latest craze.

AMC announced on Thursday that it has completed the offering of 43 million shares it launched on April 29. AMC CEO and President Adam Aron said, "the additional cash raised puts AMC in a stronger position to tackle the challenges and capitalize on the opportunities that lie ahead." Further, the hashtag #AMCSqueeze trended on Twitter, which seems to have brought in another Redditt-led wave of retail investors.

The technical picture looks now very bullish. We can take some credit here at FXSTREET for at least identifying the key levels and the potential for an explosive move. As ever with trading, nothing is set in stone, so the most important thing is to identify the key levels and potential price action at those levels. No one can just say it is going up or down and get it right all the time. But if you watch the key levels, react accordingly, and manage your risk it should at least give you an advantage.

So where to now? Well, $14.54 is the next level to target for AMC. Yesterday's move nearly got there but stopped just short. Some would see that as a bearish sign but a 24% move is more than enough so let us not be too greedy. Ideally, AMC would consolidate and then move to take out the $14.54 level. The problem with sharp aggressive moves is the lack of consolidation zones. These kinds of areas allow traders to become used to the price and more accepting, which creates stability. Sharp moves have little price discovery so a price that flies sharply higher can drop quickly without time to consolidate. This is exactly what happened AMC in January, $5 to $20 in about 3 days and back to $6 a few days later. 

So, ideally some consolidation would be preferable before regrouping for a move to take out $14.54. This then sets the scene for another ascent of $20. 

$12.22 and the upper triangle line at $11 are keys to hold the bullish trend. A break of $11 will likely see AMC move to test the key $8.95 support. A break of that will see AMC head quickly for sub $6.

At the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor. 

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page. 

Errors and omissions excepted.