AMC Stock Price: AMC Entertainment tumbles to 10-month lows, closes below $14

Update: AMC stock price tracked the downbeat mood seen on Wall Street on Monday, following a mixed start to the week. Rising uncertainties over the Russia-Ukraine war combined with surging borrowing costs worldwide on expectations of a hawkish Fed pivot soured the market mood. The peace talks between the two warring nations were “paused” to be continued on Tuesday. Meanwhile, the US Treasury yields rallied to fresh near-monthly highs on the expected 25 basis point rate hike next week. Adding to risk-aversion were fresh lockdowns in Chinese cities due to covid resurgence, which has raised doubts on the country’s economic recovery. AMC stock price tumbled to fresh ten-month lows of $12.96 before recovering some ground towards the NY close. The stock price ended the day 5.17% lower at $13.56.

AMC Entertainment stock (AMC) continued to edge closer to $10 as it lost a hefty 6.6% on Friday. The stock has been under pressure despite a strong opening weekend for the new Batman movie. AMC says it was the third-highest weekend since the pandemic, and this weekend was also reportedly another strong one.

However, AMC theatres may be full, but AMC stockholders are not seeing the benefits as the shares keep falling in price. This is not solely AMC's fault. The whole market is falling as the world prices in a new risk environment both geopolitically and macroeconomically. AMC as a growth stock is especially unsuited to this new environment, and that is why we have slapped a $10 price target on AMC.

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AMC Stock News

Another strong weekend for The Batman, but that failed to ignite the stock last week. Monday should see a bounce as global markets look to peace talks and hopes are high in equity land as all markets are up sharply this morning. The follow-through from AMC will be telling. We also note some recent insider sales from Benzinga, which are reasonable-sized amounts. We are by now all familiar with following insider buys and sells. Research shows insider buys are more important. People sell for different reasons, but it is still a small negative sign. 

Source: Benzinga Pro

It has not been a great time for growth stocks so far in 2022, and the situation is unlikely to change any time soon. Rivian (RIVN), the poster child of peak IPO in Novembe,  is taking quite the hammering as the last results once again disappointed investors. 

AMC Stock Forecast

Friday saw AMC close below the key $14.54 support. This is the first close below this key level and in our view marks a serious bearish development. We may get a bounce on Monday, but it will be of the dead cat variety. There is some support on the way lower from $12.20, but the lure of $10 will be too high once it gets into view. Short interest has been growing but nothing too dramatic – about two days to cover based on current volumes. You should expect short interest to grow as the stock declines. 

AMC stock chart, daily

The author is long Rivian puts.

Previous updates

Update: Following a positive start to the day, Wall Street turned red mid-US session, with the three major indexes finishing the day with losses. AMC Entertainment is down 4.55% and changing hands at $13.63 per share. The Dow Jones Industrial Average was the best performer on Monday, ending the day pretty much unchanged, while the Nasdaq Composite was the worst performer, as it lost 2.04%. US government bond yields skyrocketed, with the 10-year Treasury note yielding as much as 2.147% a multi-week high. Market players are pricing in a rate hike coming from the US Federal Reserve, scheduled to meet next Wednesday and pull the trigger for the first time in the pandemic era. 

The mood soured as the Ukraine-Russia crisis continues to escalate. The latest round of peace talks was "paused" according to the Ukrainian representative Mikhail Podolyak, who also reported that talks will continue on Tuesday. Meanwhile, the US told its NATO allies that it believes China is willing to provide economic and military support to Russia, while the European Commission announced another round of sanctions on Russian people and entities. Despite the dismal mood, commodity prices edged lower at the beginning of the week. 

Update: Trading all the way back to $12.92 near Monday's open in New York, AMC will be heartened to see shares making their way back toward last Friday's closing price. 90 minutes into the first session of the week, AMC stock is down 1.6% at $14.07. Since the open where shares traded down 7%, nothing short of a rally has engulfed the storied cinema chain. All three major indices are up at the moment, though the Nasdaq is up just 0.2%. When Shares of AMC fell below $14.54 this past week, FXStreet noted that the next major support area was at $8.95. What the market is saying today is that shareholders will certainly put up a fight before the beleaguered stock makes it back there. It seems there may may be a hidden group of investors enticed by AMC's most recent earnings announcement, which showed the theatre chain growing revenue briskly.

Prior Update: AMC stock has opened sharply lower in yet another disappointing move for AMC apes and other investors in the name. The FXStreet price target of $10 was not meant to be short-term, but AMC stock is in danger of triggering a move to that level more quickly than feared. The macro environment has totally changed, and rate rises are on the way from the Fed this week. Stocks with high growth rates or those carrying too much debt will continue to be severly punished. AMC is currently trading at $13.18, now down 7.2% in the first five minutes of trading. This is entirely a capitulation trade now that the support at $14.54 was broken. Regular readers will know we have been identifying this level as key for some weeks now, and we have stuck to our bearish outlook even though we are aware many of our readers are holders of the stock. It gives us no pleasure to bring bad news. $8.95 is the next major support.