Keep an eye on AMC Entertainment (AMC), as a potential short.
After exploding as a meme stock, it’s become excessively overbought.
If you pull up a two-year chart of AMC, it’s clear to see. Not only is it over-extended at its upper Bollinger Band (2,20), it’s wildly overbought on RSI, MACD, and Williams’ %R. When these same indicators align in overbought territory, 80% of the time we see a reversal. Down about $5 a share at the moment, AMC could pull back even more.
In addition, the company isn’t out of the woods just yet.
AMC just posted a loss of $567.2 million, or $1.42 a share, which was above expectations for a loss of $1.34 a share. Quarterly sales came in at $148.3 million, a considerable decline from the $941.5 million posted year over year. Total adjusted revenues of $147.7 million also missed estimates falling for $153.43 million.
Detached from reality, shares of AMC could pull back even more.
At the moment, we’d look to go short AMC.
