AMC Entertainment Holdings Stock News and Forecast: AMC drops again, but a bounce may be in the cards

AMC remains the king of social media, but the stock itself is failing to excite as it suffers a gradual decline in sentiment and strength. AMC stock surged after its investment in Hycroft Mining (HYMC) with AMC stock trading as high as $34.33 at the end of March. Since then it has largely been one way traffic, and as of Wednesday's close AMC stock finds itself almost 50% lower from those highs. The reason as ever can be put down to falling momentum, both in terms of price and social media mentions. Trading AMC and other meme stocks largely concerns momentum trading, so knowing when it is rising and falling is key. 

Classic signs of rising stock momentum we look for are obvious social media site mentions, volume spikes and price spikes of course. How to spot falling momentum and know when to get out of momentum plays is definitely more tricky. Some obvious signs are falling social media mentions, falling volume and the regular session price not reaching premarket highs. Also the opening price is close to the high of the day, while the closing price is near the low of the day's range. 

AMC Stock News

AMC is a constant near the top of social media mentions, and that has not changed despite the recent price falls. The last major spike was down to the investment in Hycroft Mining (HYMC). This created a frenzy, but another key sign to watch for in momentum plays is when a price spike ends at a lower high than the last price spike. In this case AMC spiked to $34.33, which as we can see from the chart below failed to break the downtrend line. We then saw 13 down days out of the next 16 sessions. AMC not only failed at the downtrend line, it also failed at the 200-day moving average.

While many of you are in AMC for more emotional reasons, we would always urge a lack of emotion when trading. This is not an us versus hedge fund crusade or an us versus short seller crusade. This is about making money for yourself, plain and simple. The AMC investment in HYMC was quite small, and despite HYMC stock surging, it was never going to yield significant cash to justify AMC's stock price rising so much. Once momentum dropped off, the resulting fall off was inevitable.

AMC Stock Forecast: Expect the bounce

Right now, AMC is just testing the $17 support, but this looks more and more like it may break in the near term. Right now though the Money Flow Index (MFI) has moved into an oversold area, but the Relative Strength Index (RSI) is not confirming this move. That makes us cautious of issuing a more bearish call – well, that and the sheer size of the fall over the last two weeks. There is a 50% chance we should see at least some small bounce. 

AMC stock chart, daily

The short-term, 15-minute chart shows us some key levels for intraday trading. Volume at $17 is high, so this is our support on daily and intraday time frames. AMC can bounce through the volume gap up to $18 where again there is a large equilibrium volume profile. 

AMC stock chart, 15-minute