AMC Entertainment’s Stock: 2021 in Retrospect and What’s Ahead Into 2022

January 6, 2022Updated: January 7, 2022

AMC Entertainment Holdings, Inc. plunged about 9 percent at one point on Thursday morning before bouncing up from the $20.91 level.

AMC has declined about 20 percent over the past five trading days as the Omicron COVID-19 variant spreads like wildfire, threatening stocks dependent on remaining open.

2021 in Retrospect

The theater chain’s stock brought much controversy during the 2021 trading year as retail traders, calling themselves “apes,” piled into the stock and sent AMC on two separate short squeezes toward the moon about six months apart, in January and June.

Critics of the apes and their goal—to make Wall Street accountable and transparent by putting an end to market manipulation through naked short selling and dark pool trading—said dark pool trading isn’t predatory and that because the amount of naked shorting is counted in total short interest, it’s not a manipulation tactic.

On the fundamental landscape, AMC may be overvalued because the company isn’t profitable and isn’t expected to turn a profit over the net 12 months, according to analysts. When AMC printed its third-quarter earnings on Nov. 8, it showed a loss of 44 cents per share but beat the consensus estimate of a 53 cents per share loss. AMC also beat on revenue and said it doesn’t expect to borrow any money over existing credit lines over the next 12-month period.

Looking Ahead to 2022

On Jan. 3, AMC CEO Adam Aron took to Twitter to outline his New Year’s resolution for the company that focuses on strengthening the balance sheet.

“I’d like to refinance some of our debt to reduce our interest expense, push out some debt maturities by several years and loosen covenants,” Aron wrote.

As of November, AMC’s interest payments had grown to about $332 million in the first nine months of the year alone.

Aron is revered by many in the ape communities across various social media sites for not only his willingness to embrace retail traders but to tailor the business toward their interests by accepting Dogecoin as payment for gift cards, tickets and concessions and entering into the NFT space.

Whether or not AMC will be able to turn its business profitable over the coming years will not be seen for some time but if 2021 reflects anything about the stock market, share prices do not always align with company fundamentals, which is where technical analysis comes in.

AMC Chart

On Thursday, when AMC bounced and wicked from the $20.80 level it created a bullish double bottom pattern on the daily chart when paired with similar price action at that level on Dec. 14. If AMC closes the trading day near its opening price or higher, it will print either a long-legged doji candlestick or a hammer candlestick, which could indicate higher prices will come on Friday.

Both candlesticks are often found at the bottom of a trend and paired with the double bottom pattern could indicate a strong reversal is in the cards.

AMC’s relative strength index is hovering just above the 30 percent level, which indicates the stock is oversold and can be a buy signal for technical traders.

By mid-day, AMC had far higher-than-average volume with about 36 million shares having already exchanged hands compared to the 10-day average of 33.18 million. A higher amount of volume in a stock indicates there is a high level of trader and investor interest.

AMC has resistance above at $25.79 and $29.45 and support below at $20.36 and $17.07.

Benzinga AMC Chart

By Melanie Schaffer

© 2021 The Epoch Times. The Epoch Times does not provide investment advice. All rights reserved.