- AMC stock ended Wednesday up 8% as Wall Street applauded strong earnings reports.
- The more than 400% gains seen by AMTD Digital prompted further meme action.
- AMC stock traded down 3.9% at $17.51 in Wednesday’s premarket.
Update: AMC Stock ended its run for the fourth straight trading day on Wednesday, booking a whopping 8.01% lead. In doing so, the company’s stock price hit a nine-day high of $18.27, although it ended a bit lower at $18.21. Bulls need to retake the July 21 high at $18.37 to resume its bullish momentum towards the $20 mark. Global equities rose to their highest levels since early June, helped by US earnings and strong PMI data from S&P Global and ISM Services. AMC’s stock price encouraged market optimism while capitalizing on gains from Chinese tech companies. Additionally, the recent bizarre rally in AMTD Digital Inc (HKD) also helped AMC build strong rally momentum.
AMC Entertainment (AMC) stock is riding the wave of the newest meme stock in town. This new stock of memes is Digital AMTD (HKD), a sort of shadowy Hong Kong-based investment bank that has risen as much as 33,000% since its July 15 IPO. This type of move has led observers to believe that meme stocks are back in risk mode. Pre-market trends point to another rally from AMDD Digital on Wednesday, which could mean AMC stock should also rally.
While the broader market had a tougher start to the week, AMC stock rose 15.8% in the first two sessions. On Wednesday, AMC stock pulled ahead in pre-market, up another 3.9% to $17.51.
AMC Stocks News
The most important aspect of AMC’s recent rise, however, is CEO Adam Aron’s tweet from last month:
I keep asking myself “Wen pounce?” Know this: 1. I always keep my word. 2. I have said publicly that a jump will not occur until the second quarter 2022 results are announced. 3. Press release issued today indicating that the second quarter results will be announced on Thursday August 4th. Read between these lines.
— Adam Aron (@CEOAdam) July 7, 2022
Thursday, August 4 is tomorrow, with much of the retail crowd that has been following AMC for some time gearing up for the prophesied MOASS. It means the mother of all short cuts. Traders believe that once AMC Entertainment announces its second quarter results, a high level of buying will destroy institutional short sellers and produce such upward pressure that they will be forced to buy back their shorts at staggering prices. Think of it like the hobbits getting ready for Helm’s Deep.
On AMC’s second-quarter earnings call, which is scheduled for post-trade Aug. 4, Wall Street expects adjusted earnings per share of -$0.23 on revenue of $1.18 billion. Analysts are mixed on their outlook ahead of the release.
The DC League of Super-Pets from Warner Bros. grossed $23 million on its debut over the weekend, which mostly impressed box office watchers. It was still below the winner of the previous weekend, Nope. This Jordan Peele horror flick grossed $44 million in its opening week and has now surpassed $80 million overall. It doesn’t open internationally for a few weeks but is already the highest-grossing original film of its opening weekend since Peele’s Us, which came out before the pandemic.
None of these movies come close to Minions: The Rise of Gru, which grossed $714 million worldwide, or Thor: Love and Thunder, which grossed $665 million worldwide.
IMAX CEO Richard Gelfond recently said he was impressed with movie attendance. “We’re only down 5% from 2019, which was our best year ever,” Gelfond said. IMAX reported earnings last week and beat revenue forecasts.
AMC Stock Forecast
It is unlikely that there will be any significant sales before the release of the second quarter results. While AMC stock appears to have hit resistance around $17.50 at the moment, much will depend on the outcome. It should be noted that the Relative Strength Index (RSI) returns towards its peak on July 21st. This shows the strong demand for AMC shares and demonstrates that there is some way to go before an overbought reading.
Right now, the bulls will be thinking mostly of breaking above the July 21 high price at $18.37. Support is seen where the 9-day and 21-day moving average crosses around $15.30 and then at the trendline of longer-term support at $14. This trendline started moving up on May 12th, so it’s almost three months old and is probably quite hard to break in the short term.
AMC Daily Chart
Update: AMC Stock ended Wednesday at $18.21 per share, up 8.01%. The gains were directly related to the positive tone on Wall Street, as all three major indices managed to end the day in the green. The Dow Jones added 1.28%, up 5.51%, the S&P500 added 73 points, while the Nasdaq Composite was the best performer adding 2.59%, up 13.84% from compared to a month ago. Upbeat US data supported equities as a strong US services PMI pointed to a resilient economy, despite fears of a possible recession.
Additionally, several US Federal Reserve officials have hit the wire since the start of the week and signaled that they are far from done with quantitative tightening. On the other hand, most believe that inflation will continue to widen and will likely require more aggressive central bank action. At the end of the day, speculative interests put hake back on the table at 75 basis points in September.