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.