Although AMC Entertainment (NYSE: AMC) stocks had weak price performance this year, mired by significant dips and mild recoveries, they might soon enter a bullish phase, according to a rare technical analysis (TA) indicator that has suggested the strong chance of an explosive rally.
Specifically, AMC stock has recently demonstrated a golden cross, the first such chart pattern to occur for the shares of the American entertainment company since February 2021, according to the observations shared by markets analytics platform Barchart in an X post on August 21.
Furthermore, the platform’s team explained that, despite AMC stock’s long-term chart “not looking amazing,” historical data shows that the last time it made a golden cross, its shares soared by more than 1,200% over the following four months, which, in this case, would mean an increase to a whopping $65.
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Indeed, a golden cross indicates a bullish market on the horizon and occurs when a short-term moving average (MA) crosses above a long-term MA. In the case of AMC stock, this has happened with its 50-day MA crossing above the 200-day MA, reinforced by substantial trading volumes of nearly 20 million traded shares per day.
Wall Street analysts’ take on AMC stock
On the other hand, Wall Street experts are rather bearish on the AMC stock, with an average expected price of $4.80 in the next 12 months, which suggests a 4% decline from its current situation, the lowest target sitting at $3.20 (-36%), and the highest at $8 (+60%).
At the same time, three of them have rated AMC stock as a ‘sell,’ with an equal number of experts recommending to ‘hold’ and with no ‘buy’ calls. Among the neutral crowd is Wedbush analyst Alicia Reese, who has maintained a ‘hold’ rating and $4 price target, arguing that:
“Since the beginning of 2022, AMC has reduced its debt by $1 billion but still has $4 billion remaining net debt. (…) We expect AMC’s shares to remain volatile as its shareholders dislike its frequent share issuances.”
AMC stock price analysis
For the time being, AMC shares are changing hands at the price of $5, which represents a drop of 2.91% across the past week, a 5.30% decrease on its monthly chart, and an accumulated loss of 18.17% since the year’s turn, as per the most recent data.
So, why is AMC stock so low? Notably, AMC shares dropped dramatically from their 2024 high of $6.85 in May following the news that the company planned to enter into new equity agreement as part of the effort to lower its outstanding debt, and haven’t truly recovered since then.
That said, the predicted surge could bring much-needed relief from the dips, provided that the golden cross delivers expected results and technical indicators, e.g., the currently flying weekly bull flag, remain positive. However, trends in the stock market can easily change, so doing one’s own research is critical.
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