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

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. Nevertheless, over the previous five trading days, despite a bad trading session overall for the stock market, investors in AMC stock still have a gain of $2.06, or 37.66%. 

The decline in the market put an end to a run of four consecutive days of 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 last 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 surge in prices, 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.

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.

On Wall Street, five analysts who, over the last three months, evaluated the stock have given an over 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.

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 currently 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, which was 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 been as bullish and in turn have impacted the shares.

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.