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AMC stock down over 5% after a recent spike; Here’s why

AMC stock down over 5% after a recent spike; Here’s why
Jordan Major

On November 16, AMC Entertainment (NYSE: AMC) stock dropped by $0.41, or 5.16%, to trade at $7.53 by the time the market closed. Despite a lousy trading session overall for the stock market, investors in AMC stock still have a gain of $2.06, or 37.66%, over the previous five trading sessions. 

The decline in the market ended a run of four consecutive gains for AMC’s stock price, which finished the day $19.50 behind its 52-week high of $27.03, hit on this day last year (November 17). In the previous month, AMC has been trading in the $5.05 – $8.35 range, which is quite wide and is currently trading near the high of this area. 

Notably, the volume has been much greater in the previous several days, which is a good sign during a strong uptrend. Given the recent price surge, it may be prudent to wait for some stabilization or a fall before contemplating an entrance. However, resistance can be found at $7.96 from a horizontal line in the daily time frame.

AMC resistance. Source. data. See more stocks here.

Thanks to recent price action, AMC is trading above its 20-day simple moving averages (SMA) (23.24%), although it is currently below its 50-day and 200-day SMA. 

AMC technical analysis

On a daily time frame, the AMC technical analysis indicators are mixed. The moving averages indicate a ‘buy’ at 9, and the daily summary gauge is also in the ‘neutral’’ zone at 8. However, the daily oscillators gauge also points to the ‘sell’ zone at 3, although neutral sits at seven.

AMC 1-day technical analysis. Source: TradingView

On Wall Street, five analysts who evaluated the stock over the last three months have given an overall consensus ‘moderate sell’ with an average price forecast for the next year at $2.80. Two analysts have advocated to ‘hold’ AMC, while three experts have suggested ‘sell’ the stock.

Wall Street analysts’ price targets for AMC. Source: TipRanks

Compared to the current price of $7.53, the average target represents a drop of 62.82%. Interestingly, even the highest price target for AMC shares, $7.50, is lower than where the stock is now trading.

AMC announced after-hours on Tuesday, November 8, that its non-GAAP earnings per share for the third quarter were $0.20, which was $0.04 more than analysts’ expectations. The revenue reached $968.4 million, a year-over-year increase of 26.9% and above projections by $7.43 million.

Following the release of the Q3 results, investors began taking an interest in the share price of AMC since the company still had a low value. As a result, AMC’s share price gained nearly 30% in the last two days of last week as global markets outperformed. So far this week, markets have not been as bullish and, in turn, have impacted the shares.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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