146

AMC stock drops over 40% – here’s what we know

AMC stock drops over 40% - here's what we know
Dino
Kurbegovic
1 month ago
3 mins read

On August 22, AMC Entertainment (NYSE: AMC) stock plunged by 41.59%, making for a miserable trading day for shareholders. AMC’s AMC Preferred Equity Units, also known as Apes, launched on the same day with the ticker APE, with the new class of stock starting trading on Monday following the opening of the stock market.

AMC Chief Executive Adam Aron, took to Twitter to fuel enthusiasm for the new shares, claiming that AMC’s value will be equal to its own value plus the new APE share’s value. 

In the meantime, Gareth Soloway, Chief Market Strategist of InTheMoneyStocks.com, discussed the market outlook with Kitco News, with a special focus on AMC stock and how investors should have traded the news of the new shares being issued.

“If you’re in these trades, that’s all fine and good, and if you’re in the money, there’s no reason you have to get all the way out. But what you want to do is, you want to play it smart you want to take a little bit off the table; as you hit a resistance line, take a little bit off when you hit the next one, take a little bit off. So in this situation, at the 200 moving average, that would have been smart to take a little bit off the table, and then you can let the rest run.”

AMC chart and analysis

In the last month, AMC has been trading in a wide range from $10.30 to $27.50, with prices falling strongly in the last few trading sessions. Technical analysis indicates a support zone from $10.36 to $10.45, and at the moment, the stock does not present a quality setup for potential investors to get in. 

AMC 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

TipRanks analysts have a moderate sell’ rating consensus, seeing the average price in the next 12 months reaching $7.50, –28.30% lower than the current trading price of $10.46; notably, no analysts have given a buy rating.

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

Meme and crypto

Additionally, Soloway touched on the cryptocurrency markets along with AMC and the stock market, indicating that there is certainly a connection between the crypto and stock markets. 

“Just keep an eye on the stock market. That is going to be your indicator, if this continues and we continue to see this fall in the S&P, I don’t believe that the crypto markets can withstand that.”

The ‘meme stocks’ and their rise and fall could exert a more significant gravitas on the broader markets, hitting cryptos and other stocks alongside it. 

Earlier this month, Kevin Wadsworth and Patrick Karim, technical analysts of Northstar & Badcharts, had stated that a few of the cryptocurrencies are already losing momentum and appear to put in their highs for what he calls “a bear market rally,” Wadsworth added, “we’re either at or very close to those um those peaks at the moment.”

The two analysts also agreed that cryptocurrencies and Bitcoin are a play on tech stocks. Owing, in part, to the fact that crypto hasn’t been around for a long time.

As a result, it’s difficult to anticipate how they will react, if, and when the stock market will embark on a much longer and more significant downturn.

Buy stocks now with Interactive Brokers – the most advanced investment platform


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

Latest News

Join us on Twitter or Telegram

Or follow us on Flipboard Flipboard

Like the article? Vote up or share on your social media

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s

Dino Kurbegovic
Author

Dino is an investor and technology enthusiast with years of experience in managing complex projects. At Finbold he covers stories on stocks, investing, micro and macroeconomic trends. Also, he’s also building a micro solar power plants in his hometown.

AD