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- 1 AMC stock witnessed a massive spike in buying volume in March end.
- 2 AMC stock price is up by 12.08% on a weekly basis and strikes the 50 day EMA.
- 3 AMC Entertainment (NYSE: AMC) might be acquired by AMAZON.
AMC stock price gained 12.08% over the week, showing decent recovery from its 52 week low at $3.77. AMC stock witnessed a massive spike in the buying volume at the end of the month suggesting that short covering was triggered from the lower levels.
Short covering is the act of buying a stock to close the short position on that stock.
AMC stock price surged when rumors circulated in the market that Amazon (NASDAQ: AMZN) was planning to buy AMC Entertainment. However, there is no official confirmation given by either Amazon or AMC.
AMC stock price reacted positively to the rumor and defended the $4.00 mark. According to an Intersect report, Amazon (NASDAQ: AMZN) former CEO Jeff Bezos told his investment advisors to examine the possibility of acquiring AMC Entertainment (NYSE: AMC). The report indicates Amazon is looking for the possibility of using AMC theaters as marketing weigh stations which will help promote Prime movies and other Amazon services.
AMC Entertainment (NYSE: AMC) released its fourth quarter earnings on February 28, 2023, after which, the stock price continued to decline for a while. The downfall halted near the demand zone and bulls tried to climb above the 50 day EMA.
Will AMC Stock Short Squeeze Rally Continue?
AMC stock price closed the previous session at $5.01 with an intraday rise of 0.8%. Market capitalization stood at $2.60 billion. At the beginning of March, AMC share price tried to hold the breakout level of $7.00 but sadly, it failed and reverted in the downward direction. Moreover, it also attempted to break the 200 day EMA but ended up getting a rejection from the supply zone. Therefore, $7.00 could act as a strong hurdle if the short covering rally continues in the coming days.
Presently, AMC stock price is in the initial phase of a trend reversal as well as a short squeeze. The confirmation of the rally’s further movement can be expected when the bulls regain the 50 day EMA.
AMC Stock Price Might Test Equilibrium Level
AMC stock price is stuck in a wide range between $4.00 to $8.00 and does not show any signs of range expansion. AMC share price tried multiple times to break the lower range but the bulls managed to defend the support indicating that the buyers are active at the lower levels.
Currently, AMC stock price (NYSE: AMC) is reversing upward by taking support at the lower range and is expected to retest the equilibrium level of $6.00. Technical analysis suggests the recent up-move in AMC share price is due to a short squeeze and that prices might, again, struggle at higher levels.
Conclusion
AMC stock price witnessed a short squeeze amid rumors of Amazon planning to acquire AMC Entertainment (NYSE: AMC). However, no official statement was released by either Amazon or AMC. Technical analysis suggests that the recent up-move in AMC stock price is news-based and that the prices might again face resistance on the higher levels.
Technical levels
Resistance levels : $7.00 and $9.00
Support levels : $4.00 and $3.79
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
