The AMC share price has been on a strong bull run for the past month. The stock has jumped nearly 20% since the start of this month and nearly 40% since the start of August. It closed in 3.05% higher on Monday at $51.69 after Walt Disney announced that it would be releasing its upcoming films in theatres for the rest of the year. Its total market capitalization currently stands at $26.53 billion.
AMC Entertainment Group (NYSE: AMC) is the world’s largest movie theater chain. The American movie theatre chain was ranked as the world’s largest after acquiring several cinemas like Odeon cinemas, Carmike cinemas, and UCI cinemas.
The onset of the coronavirus pandemic forced AMC Entertainment to shut its doors for moviegoers as most governments imposed strict lockdown restrictions. Ever since, the company has been struggling to recover as online streaming services make the journey harder.
However, Walt Disney came to AMC’s rescue as it announced that it would release its upcoming films exclusively in movie theatres for the rest of this year. With the strict social distancing regulations and shut down of movie theatres, Disney began to release its movies on its streaming platforms.
A recovery in theatre traffic is certainly good news for the American movie theatre chain. Increased attendance could help boost sales with time. While Disney’s announcement is music to AMC’s ears, the company still faces major challenges like huge debt loads.
The four-hour chart shows that the AMC share price has been on a strong bullish trend for the past few weeks. The AMC stock has been hovering over the crucial $50.00 level for the past week. Along the way, it has managed to move above the 25-day and 50-day exponential moving averages.
Therefore, with Disney’s new decision, the stock is likely to extend its rally as the bulls target $61.00. On the flip side, a move below the 50 DMA at $45.90 will invalidate this view.