AMC Entertainment’s shares have surged by almost 50% in the past week, so could they go higher?
Why Are AMC Shares Soaring?
If you remember the GameStop saga from January this year, you’ll know that even the most beaten-down stocks can start soaring when a group of traders gets together on social media to pump up the price in an attempt to squeeze out the short-sellers.
Like GameStop, AMC Entertainment is one of the “meme” stocks that has seen its share price rise on increasing interest and trading volume driven by the excitement on websites such as Reddit rather than by any change in the company’s fundamentals. Many novice traders and investors buy into these stocks’ stories simply out of fear of missing out (FOMO), and many of them have made money by doing so, if only due to beginners’ luck.
But wait! Let’s look behind the hype, to what this prospect stock looks like to the technical trader and the fundamental investor.
Regardless of what is driving the stock higher, technical traders will notice that over the past five days, AMC’s share price has followed the bullish pattern of higher highs and higher lows. And it’s a brave trader who bets against a rising tide.
Whereas a “meme” stock might be driven more by hype than commercial substance, fundamental investors will be mindful that something fundamental has changed since last summer. Thanks to vaccination efforts in many countries, economies look to be opening up again, and May 17 marked the day that cinemas were allowed to reopen in the UK. If the crowds come back post-Covid, cinema shares could go higher as their business prospects improve.
Where Can I Buy AMC Entertainment?
Due to the volatile nature of the so-called “meme” stocks, not all brokers allow you to bet on them by opening new positions, but we’ve found the ones that do.
To buy Cardano on eToro, traders will need to sign up for an account and find it on the platform.
eToro is one of the world’s leading online brokers, offering access to a huge array of cryptocurrencies as well as traditional assets like stocks and commodities. It has been a stalwart of the industry for over 10 years and is one of our most trusted partners.
Plus500 is one of the UK’s top trading brokers. Offering products on cryptocurrencies, stocks and commodities, the broker offers an easy way to buy, sell and trade cryptocurrencies such as Polygon.
The platform also features plenty of beginner friendly features, such as a learning centre and an intuitive easy-to-use user interface.
What is AMC Entertainment?
AMC Entertainment Holdings, Inc is the parent company of the brand you may know better as AMC Cinemas. The clue is in the name, as this is the largest cinema chain in the USA, and it has operations around the world.
Like all entertainment and hospitality venues, AMC was forced to close its doors to customers during the Covid-19 pandemic lockdowns. With restrictions easing and the share price rising, it may be time to look again at AMC as a potential stock purchase.