Like GameStop (GME) - Get GameStop Corporation Report, AMC Entertainment (AMC) - Get AMC Entertainment Holdings Inc. Class A Report just never seems to fade from relevance these days.
The shares are up about 4% so far on Friday but were much higher -- 12% -- earlier in the day. That follows Thursday’s action where the stock jumped more than 23%.
The move comes on news that AMC will raise more capital, putting almost $500 million in its coffers.
Investors aren't worried about debt or dilution at this point. They want reassurance that AMC will be in a good position going into what they hope is a strong rebound from COVID-19.
With additional capital raised, that assurance is being granted. Keep in mind, the company raised capital earlier in the year, too.
The question now becomes: How much upside could be in the stock price? Let’s look at the chart.
Trading AMC Stock
Earlier this week, AMC struggled to give us a weekly-up rotation over last week’s high, as well as clear the 50-day moving average.
After a couple of tries, it finally ignited through this area on Thursday. As previously mentioned, the shares closed more than 23% higher that day, although the stock was up as much as 38% at the day’s high.
Either way, it’s clear that the momentum has been with the bulls lately. The stock is working on its sixth consecutive daily gain and sits just below a key area on the chart.
That level is $14.59, which is the 61.8% retracement of the explosive rally we saw earlier this year.
Before we dissect that level, though, let’s focus on a few others. With AMC’s powerful rally on Thursday, the shares not only went weekly-up, but they also went monthly-up by rotating over the April high at $12.22. The stock also cleared downtrend resistance.
The latter has been pretty stout resistance over the past few months.
To clear these levels so impressively makes them key going forward. Specifically, I want to see AMC stock stay above the April high. Moving forward, that’s the goal.
On the upside, the $14.50 to $14.60 zone looms large. Above it not only puts AMC over the 61.8% retracement, but also over the March high and prior resistance. That could open up $17 and potentially higher.