AMC stock looks set to break $10

  • AMC stock took another leg down on Friday as growth stocks remain pressured.
  • AMC was pumped by The Batman attendance, but all it did was a dump.
  • More losses are likely as the trend remains strongly bearish for AMC.

Update: AMC stock has opened sharply lower in yet another disappointing move for AMC apes and other investors in the name. Our price target of $10 was not meant to be short term but AMC stock is in danger of triggering a move to that level more quickly than feared. The macro environment has totally changed and rate rises are on the way from the Fed this week. Stocks with high growth rates or carrying too much debt will continue to be severly punished. AMC is currently trading at $13.18 now down 7.2% in the first five minutes of trading. This is entirely a capitulation trade now that the support at $14.54 was broken. Regular readers will know we have been identifying this level as key for some weeks now and we have stuck to our bearish outlook even though we are aware many of our readers are holders of the stock. It gives us no pleasure to bring bad news. $8.95 is the next major support. 

AMC Entertainment stock (AMC) continued to edge closer to $10 as it lost a hefty 6.6% on Friday. The stock has been under pressure despite a strong opening weekend for the new Batman movie. AMC says it was the third-highest weekend since the pandemic, and this weekend was also reportedly another strong one.

However, AMC theatres may be full, but AMC stockholders are not seeing the benefits as the shares keep falling in price. This is not solely AMC’s fault. The whole market is falling as the world prices in a new risk environment both geopolitically and macroeconomically. AMC as a growth stock is especially unsuited to this new environment, and that is why we have slapped a $10 price target on AMC.

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AMC Stock News

Another strong weekend for The Batman, but that failed to ignite the stock last week. Monday should see a bounce as global markets look to peace talks and hopes are high in equity land as all markets are up sharply this morning. The follow-through from AMC will be telling. We also note some recent insider sales from Benzinga, which are reasonable-sized amounts. We are by now all familiar with following insider buys and sells. Research shows insider buys are more important. People sell for different reasons, but it is still a small negative sign. 

Source: Benzinga Pro

It has not been a great time for growth stocks so far in 2022, and the situation is unlikely to change any time soon. Rivian (RIVN), the poster child of peak IPO in Novembe,  is taking quite the hammering as the last results once again disappointed investors. 

AMC Stock Forecast

Friday saw AMC close below the key $14.54 support. This is the first close below this key level and in our view marks a serious bearish development. We may get a bounce on Monday, but it will be of the dead cat variety. There is some support on the way lower from $12.20, but the lure of $10 will be too high once it gets into view. Short interest has been growing but nothing too dramatic – about two days to cover based on current volumes. You should expect short interest to grow as the stock declines. 

AMC chart, daily

AMC stock chart, daily

The author is long Rivian puts.