The meme stocks have had amazing rallies! AMC moved over 60% in two days, and GME moved over 50% in four trading days. What if I told you the technicals gave us the heads up days before? Members of our discord channel can attest to that. We suggested followers to watch both AMC and GME because they met our reversal set up criteria. When I see this type of set up, plus the power of the meme wallstreetbets crowd, then you know you have the potential of a winning combo.
What else needs to be said about AMC? The movie theatre chain is back in business, and we will have to assess after a full year of earnings without restrictions. Has the pandemic changed consumer behavior and trends so much that they will not go out to movies? I don’t think so. I think people will still take their dates for a night out at the movies. Some say that HBO and other streaming services have already damaged theatres. It does seem like movies now come out to streaming services quicker than before.
Whatever the case, AMC has a large treasure chest to deploy. They are sitting on about $1.8 billion in cash which they raised when the stock price was higher. Recently, we saw AMC deploy some of that cash. Something nobody was expecting, but being a gold bug, it brought some happiness to my soul.
On March 15th 2022, AMC announced a $28 million position (22% stake) in gold miner Hycroft Mining (HYMC). The biggest movie chain in the world has jumped into gold. Maybe they also know it’s the best inflation hedge. Some even say AMC is maybe trying to act/become like the next Berkshire Hathaway. Eric Sprott will make an investment equal to AMC. Combined, the investment comes to $56 million, which the two parties said would give Hycroft financial runway. Will they be able to get Hycroft back up and mining again? One thing is for sure, Hycroft does have the cash and backing to change things around now.
What a beautiful chart set up. Readers know we look for the similar chart structure on all our set ups. Basically, I look for a long downtrend chart. A chart that has made multiple lower highs and lower lows. A stock chart that looks like it got clapped. Nothing moves down forever, so I then expect to see a range. Something to indicate the selling pressure has subsided. What makes things even better is if I see a reversal pattern. Something like an inverse head and shoulders, double bottom etc.
AMC had a range at a major support zone (look back at how $15 used to be resistance back in May of 2021), and we held above. We then triggered the breakout with a close above $20. Since that breakout we have had a 60% move from the lows on March 28th to the highs of March 29th. CNBC is saying that meme stocks are tumbling on heavy volume today, but I really do believe it is because we have hit a resistance zone. The $32.50 zone is a good resistance zone to target. Plus you would be crazy to not take profits after a single day rally of 44% which we say on March 28th 2022.
As long as AMC remains above $20, we are in an uptrend and should expect to see multiple higher lows and higher highs. I would wait for a pullback and then a green daily candle to indicate a possible higher low. A daily close above $32.50 would also be another bullish trigger. We then have resistance at $45, and then $52.50.
