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AMC stock leaps ahead with help from AMTD Digital

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  • AMC stock advanced by 9.7% on Tuesday.
  • The more than 400% gains seen by AMTD Digital have provoked other meme stocks.
  • AMC stock traded up 3.9% to $17.51 in Wednesday’s premarket.

 

AMC Entertainment (AMC) stock is riding the wave of the newest meme stock in town. That new meme stock is AMTD Digital (HKD), a shadowy Hong Kong-based investment bank of sorts that has advanced as much as 33,000% since its IPO on July 15. That type of movement has led observers to believe that meme stocks are back to risk-on mode. Premarket trends point to another rally in AMTD Digital on Wednesday, and that may mean AMC stock is set to rally as well.

While the broader market got off to a rockier start to begin the week, AMC stock was up 15.8% in the first two sessions. Now on Wednesday, AMC stock has charged ahead in the premarket, up another 3.9% to $17.51.

AMC stock news 

The most important aspect of AMC’s recent rise, however, is CEO Adam Aron’s tweet from last month: 

 

Thursday, August 4 is tomorrow, so much of the retail crowd that has been following AMC for some time is preparing for the prophecied MOASS. This stands for the Mother Of All Short Squeezes. Traders think once AMC Entertainment reports Q2 earnings, a steep level of buying will destroy institutional short sellers and produce so much upward pressure that they will be forced to buy out of their shorts at staggering prices. Think of it like the hobbits preparing for Helm’s Deep.

At AMC’s Q2 earnings call, which is scheduled for the post-market on August 4, Wall Street is expecting adjusted earnings per share of $-0.23 on revenue of $1.18 billion. Analysts are mixed on their outlook ahead of the release.

Warner Bros.’s DC League of Super-Pets brought in $23 million in its debut over the weekend, which mostly impressed box office observers. Still it was below the previous weekend’s winner, Nope. That horror film from Jordan Peele did $44 million in its opening week and has now surpassed $80 million cumulatively. It does not open internationally for another few weeks but is already the best grossing original film in its opening weekend since Peele’s Us, which came out before the pandemic. 

Neither of these films are anywhere close to Minions: The Rise of Gru, which has done $714 million globally, or Thor: Love and Thunder, which has grossed $665 million worldwide.

IMAX CEO Richard Gelfond recently said he was impressed with movie attendance. “We’re only down 5% from 2019, which was our best year ever,” Gelfond said. IMAX reported earnings last week and beat forecasts for revenue.

AMC stock forecast

It is doubtful that there will be major selling before Q2 earnings are released. While AMC stock appears to have reached resistance around $17.50 at the moment, everything will depend on the results. Of note is the Relative Strength Index (RSI) heading back toward its high on July 21. This shows the trenchant demand for AMC stock and demonstrates there is a ways to go before an overbought reading.

Right now bulls will mostly be thinking about overtaking the July 21 price high of $18.37. Support sits where the 9-day and 21-day moving average cross around $15.30 and then at the longer-term support trend line at $14. That trend line began ascending on May 12, so it is nearly three months old and likely rather hard to break in the near term.

AMC daily chart

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