AMC stock sees further weakness in premarket

  • AMC stock dropped 2.5% on Thursday.
  • AMC Entertainment shares had their best two-day gain on Tuesday and Wednesday.
  • AMC shares are down 24% for the year but up 32% over the past five sessions.

AMC stock is off 0.5% in Friday’s premarket after shedding some ground on Thursday, as meme stocks were vulnerable despite Wall Street advances. The stock finished the day at $20.23, down 2.5%. The Nasdaq gained 1.9% on the day, so this was another session where the meme stock was disconnected from the overall risk-on trade. GameStop (GME) for its part was able to eke out a 1% gain. AMC’s mentor in the meme category has been doing well all week after CEO Ryan Cohen boosted his stake in the video game retailer.

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AMC Stock News: High number of calls expiring

AMC stock is up 32% in the past five sessions despite still being down 24% year to date. Tuesday and Wednesday witnessed an unexpected 35% joint gain, but Thursday took the day off. The rest of the US market was optimistic. In Brussels President Joe Biden announced further sanctions in conjuction with EU-member nations against more than 300 Russian politicians in a bid to put more pressure on Russia to end its war in Ukraine. There were further indications that Ukraine appears to be slowly turning the war in its favor, including the successful attack on a Russian landing ship off the coast of Ukraine in the Black Sea and new data that suggest Russia has experienced extremely high casualties. 

OIl retreated 2.8% on Thursday, and US index futures all higher on Friday. The S&P 500, Dow and Nasdaq are all around 0.3% higher, so it would seem that marketwide sentiment is remaining positive for a second straight day.

A high number of options are expiring on Friday. 15,679 call contracts at a strike of $20, 13,311 at $22, and 14,798 contracts at $25. On Thursday, volume was more than four times higher than open interest for the $20 strike.

AMC Stock Forecast: Can $20 remain as support?

$20.96 appears to be the main resistance level. It is the top of a supply ridge that reaches down to $19.34. Dropping below $19.34 could send AMC stock all the way back to $13.03 or even the dreaded $8.95 that FXStreet has been yelping about for weeks. Even before $19.34, however, the $20 level may be enough. If it is broken too suddently, bulls may give up confidence as it is an easily identifiable psychological level. Wednesday’s high of $22.34 is still the market to beat to see if bulls have the strength to keep this rally alive. Above there, resistance sits in the low $23s.

Of note, the 9-day moving average seems to be on track to converge with the 20-day and 50-day averages somewhere around $17. This may also lead to a support level near there.

AMC stock daily chart

AMC stock chart, daily

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