AMC Entertainment Holdings Inc's (NYSE:AMC) stock surged higher this week, rising alongside GameStop Corp (NYSE:GME) and other meme stocks following the return of the 'Roaring Kitty' on social media. Even after a 20% correction on Wednesday, the stock remains up 80% since Monday.
The move follows AMC CEO Adam Aron's strategic acquisitions and efforts to reduce the company's substantial debt.
Related: GameStop Stock Skyrockets As 'Roaring Kitty' Returns: Is GME Short Squeeze 2.0 Imminent?
In light of this volatility, concerns linger regarding the company's debt load, with significant payments due in the coming years. AMC's decision to issue shares in exchange for debt has also impacted shareholder value, underscoring the delicate balance between debt management and shareholder interests.
Let's look at the charts to assess what may be in store next, for AMC stock.
Charts Indicate A Strongly Bullish Trend
Price chart analysis indicates AMC's stock is currently in a strongly bullish trend, with the share price trading above its 8, 20, and 50-day moving averages.
Chart: Benzinga Pro
However, the stock is showing signs of being overbought, with the Relative Strength Index (RSI) at 83. The Moving Average Convergence Divergence (MACD) indicator suggests a buy signal, indicating potential for further upside.
The Bollinger Bands also suggest a bullish signal for both short-term (25-day) and long-term (100-day) periods, indicating positive momentum in the stock.
What to Expect Next?
Given the recent rally, investors should closely monitor AMC's stock for signs of consolidation or a potential pullback. The stock's overbought condition suggests that a period of consolidation or a minor correction could occur in the near term.
However, if the stock continues its bullish trend, investors may see further upside potential.
Investors should also carefully assess the risks associated with AMC's high debt load and the volatility of meme stocks.
While the recent rally has generated excitement among investors, it is important to maintain a cautious approach and consider the long-term prospects of the company.
Image generated using artificial intelligence via Midjourney.