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?
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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.