- AMC stock closed slightly lower on Thursday.
- $15 appears to be a sticky price for AMC.
- AMC Entertainment has experimented with raising ticket prices on popular superhero movies.
Update: AMC stock is up 2.2% an hour into Friday’s session. The stock has met resistance twice at $15.75. Friday has turned from a bear into a bull market. AMC shares and all three indices opened lower in the first few minutes of trading, but then AMC reversed gears and trended higher about five minutes in. At the moment the Nasdaq has risen by 0.7%, while the Dow is down 0.3%. This signifies that growth or more risky stocks are likely to do better and value stocks are likely to trail behind. AMC Entertainment may be mimicking GameStop (GME) as the original meme stock reported an unexpected earnings per share (EPS) loss that caused it to sell off by 7% in Friday’s premarket. GME stock is surprisingly up 2.7% in the regular session. GameStop did report revenue that beat Wall Street expectations, but typically the premarket trade sheds light on the direction of a stock in the regular session. It would seem that the market simply is in the mood to gain strength as many traders seem to think that the market’s capitulation has completed its downtrend.
AMC stock closed down 0.3% on Thursday to $15.19. Shares of the cinema chain went as high as $15.61 and as low as $14.86. The $15 level has been a sticky price over the previous two sessions this week but is not far above the range low at $12.90 reached on Monday. All three major US indices are lower on Friday with the US Secretary of State saying he did not think Russia was serious about the current peace talks. On Thursday, he also said that Russia may decide to use chemical weapons in Ukraine. The price of oil also remains elevated after the International Energy Agency said there may be a 3 million barrel a day shortfall starting in April. Both WTI and Brent are above $100 a barrel.
AMC Stock News: Raising ticket prices
AMC Entertainment has experimented with raising ticket prices on opening weekend for big blockbuster films. It did this recently with both Spider-man: No Way Home and more recently The Batman. Tickets averaged $13.92 for the opening weekend of Spider-man and $14.50 for Batman. Experts appear to think the new strategy has worked despite AMC stock now charging at least a dollar more compared to competitors such as Cinemark and Regal.
AMC is as ever a controversial investing play. Its decision earlier this week to invest in Hycroft Mining, the owner of an undercapitalized gold and silver mine in Nevada, has been criticized by all corners this week as another gimmick like NFTs and accepting crypto. Retail investors, especially those famous AMC apes, seem excited by the deal. The $28 million investment by AMC gets the movie house a 22% stake in the mine, as well as a large amount of warrants, and management says it sees a turnaround story with Hycroft. The deal with Hycroft was put together by Mudrick Capital, which also helped AMC devise its turnaround stragey one year ago.
AMC Stock Forecast: Flirting with $14.90 to its detriment
AMC shares are down 1.2% to $14.96 in Friday’s premarket. As we wrote on Thursday, $14.90 is key. Breaking through $14.90 could send AMC back to $14.54 and then $13 in short order. From there it could move even lower to $8.95.
At present AMC stock is trading near the 9-day moving average at $14.93. To continue the rally, AMC stock must make a move to overtake the 21-day moving average at $16.61. Both moving averages have dropped by about 20 cents in the past day. Once again the supply zone from $19.34 to $20.96 is the immediate bull target.
AMC stock chart, daily
Prior Update: AMC stock opened slightly lower on Friday, down 0.5% at $15.12, before rising to $15.37 and then subsiding back to even with Thursday’s close at $15.19. The ever important $14.90 support level looms nearby. All three major US indices opened lower, with the Dow and S&P 500 down 0.4% and the Nasdaq down 0.2%. This is somewhat quiet for a Friday. Oil rising above $100 a barrel is mostly already priced in. Today WTI is around $104, and Brent is trading above $107. St. Louis Federal Reserve Bank President James Bullard released a statement today concerning his dissent on Wednesday with the Fed’s decision to raise interest rates by 0.25%. Bullard argues that the US economy is quite strong and so requires a more fearless Fed to quickly raise rates to fight inflation. He favoured a 0.5% or 0.75% rate hike on Wednesday and says the Fed should target 3% by the end of the year instead of the current dot plot pointing toward 1.9%.