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AMC Stock Peeks Past $50: What Is Next?

Shares of AMC have recently breached $50 for the first time since early July. Wall Street Memes looks at what may be next for AMC stock.

AMC stock  (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report managed to break through the $50s for the first time since early July – although it failed to hold these levels for very long. Under the radar to many, shares of the movie theater operator have been closing in on all-time highs over the past month.

The recent move higher in share price can be celebrated by AMC shareholders, many of whom are known as “apes”. To them, the investment thesis is highly dependent on momentum building up until bears are squeezed out of their trades, and the trend has been favorable as of late.

Figure 1: AMC theater facade.

Figure 1: AMC theater facade.

(Read more from Wall Street Memes: CLOV Stock: Wall Street Bearishness Vs. Bullish Sentiment)

Below, Wall Street Memes discusses what could be next for AMC stock.

What the technicals say

“Apes” like to buy and hold AMC stock no matter what. Even so, we think that it is important for traders to understand support and resistance levels – at least to check whether the direction of AMC share price is in line with expectations.

Pivot points, for example, show the moment that market sentiment shifts from bearish to bullish, or vice versa. Currently, classic and Fibonacci analysis indicates a $41 pivot point (see below). So far, this price target has in fact proven to be a good entry point over the past month.

Of course, there is no guarantee that pivot prices will work in anticipating share price moves going forward. The data point should be considered alongside other factors in the trading plan.

Figure 2: AMC's pivot points at last check.

Figure 2: AMC's pivot points at last check.

Short interest approaches June levels

Short interest levels can also point at a potential rally in AMC stock. According to the most recent data from Yahoo Finance, dated August 30, 18% of the float is currently shorted.

This ratio is high relative to recent history. The yellow line below represents the estimated short interest as a percentage of the float. The indicator has been rising consistently since late July and, interestingly, has remained in line with the upward trend towards $50 in share price.

Figure 3: AMC's estimated short interest percentage.

Figure 3: AMC's estimated short interest percentage.

Current short interest is also very close to late May and early June numbers, as the table below depicts. Keep in mind that, back then, AMC stock rallied viciously off those levels, as the orchestrated “bullish attack” by the ape community led to a short squeeze.

Figure 4: AMC's short interest history.

Figure 4: AMC's short interest history.

FOMO and patience

For technical indicators and short interest data to push AMC stock higher, bullish ape sentiment is crucial. FOMO (fear of missing out), for example, can be a powerful force enabling the MOASS (i.e. mother of all short squeeze).

In any case, keep in mind that AMC stock is very volatile (call it “risky”, if you will) and patience is probably key in trying to push shorts into covering their positions.

Twitter speaks

AMC stock broke through $50 and short interest remains elevated. What do you think will happen next?

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)