AMC (NYSE: AMC) stock price is up with a bang after slumping by more than 56% yesterday. It is trading at $13.48 in premarket trading, up from yesterday’s close of $8.63.
AMC stock price bounces back
AMC, the biggest movie theatre company in the United States, has made headlines this week. After dropping to an all-time low of $1.2 early this month, the company’s shares rose to a multi-high of $20.50 this week. This pushed the market cap of the embattled company to more than $4 billion.
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Yesterday, AMC stock price cratered after leading brokers like Robinhood and Interactive Brokers suspended their trading. Holders had an option to sell their stocks, a move that was criticised by many, including Alexandria Ocasio Cortez, the Democratic Socialist.
Today, the shares have bounced back after most exchanges started to allow limited trading of these volatile stocks. Others involved in the meltdown are GameStop, Nokia, and Bed, Bath, and Beyond.
What next for AMC?
AMC has been under pressure recently because of the coronavirus pandemic. It has borrowed heavily to stay in business even as more Americans have stayed indoors. Also, there have been limited blockbuster movies. As a result, the firm has been downgraded by rating agencies like S&P Global and Moody’s.
Still, some analysts believe that it has a bright future ahead. For one, the US is ramping-up coronavirus vaccinations. This will push more people to theatres later this year. Also, many movie production companies are ramping up their activities.
Notably, AMC has used the rally to boost its balance sheet, which has also pushed its bonds to rally. It sold shares worth about $300 million at about $4.8 per share. Still, the biggest risk for AMC is that it is still renegotiating its rents with landlords.
AMC stock price technical forecast
On the daily chart, we see that the AMC stock price formed a double bottom at $2 a few months ago. It then rallied by 947% and reached a multi-year high of $20.50. Today, it is set to open at about $13.48. This price is substantially above the important support of $7.31 and all moving averages.
Also, looking at Level 2 activity shows that there are substantially more buyers. Therefore, while risks remain, the stock could jump above $20 and possibly reach $25 in the near term.