Instead, AMC helped kick off the short-squeeze bonanza and we’ve seen a number of big moves since.
BlackBerry (BB) - Get Free Report, Beyond Meat (BYND) - Get Free Report, Workhorse (WKHS) - Get Free Report, ContextLogic (WISH) - Get Free Report and others have all seen some explosive moves. What now?
So what's my meme stock focus for now? Just like GameStop was the focus the first time around, don’t be surprised if AMC Entertainment remains in the spotlight this time.
After the company successfully raised more funds, it has enough cushion - and dare we say, firepower for expansion - during what should be a massive reopening phase in the U.S.
A credit rating upgrade from S&P helps too.
In May, I pointed out that resistance was coming into play near $14.50, but that led to a perfect pullback and hold of critical support. From there, AMC surged higher.
Not surprisingly, we’re getting a notable dip in the stock. Shares are finding buyers at the 10-day moving average, just as the stock did a few weeks ago after it was rejected from $14.50.
Friday’s action is giving us an inside day, with the entire session’s trading range contained within the prior day’s range. Now it's trying to rotate higher.
On Monday, look for a break of Friday’s high or its low, as it could create a continuation trade either direction.
It’s volatile, but with support holding, investors are likely favoring the upside scenario in this one.
Aggressive traders who may already be long are likely keeping an eye on the $50 level. Above this mark could open the door to $60, then a retest of the highs.
Below Friday’s low puts $40 in play. Below that and the gap-fill down to $33.50 could be on the table, along with the 21-day moving average.
The bottom line: Provided that this short-squeeze environment persists, other meme stocks besides AMC will likely benefit. However, my focus remains on the leader for now, while watching how other stocks trade during the mania.