Since it blew past expectations in the second quarter early in August, AMC has been busy constructing a solid foundation. In the second quarter, the company’s net loss was 71 cents per share, much lower than the 93 cents analysts had predicted. This is definitely good news for AMC share price. AMC has had a wonderful week, with its stock up by about 10%.
Short-sellers at hedge funds have piled into the stock in anticipation of a larger payoff from investors. Traders are counting on retail investors covering their short positions sooner rather than later, boosting the stock’s rise. As the share price climbs, investors may also be experiencing a case of fear of missing out (FOMO).
Theatre attendance to spur growth
AMC expects the momentum it has been seeing to continue into the Halloween horror movie season. The horror film Halloween Kills, which premieres in theaters on Friday, is expected to be a significant draw this month.
The good news is that we are now getting close to the theatre numbers we had before the pandemic. The weekend box office haul of $109.1 million for the top 10 films is only 16 percent lower than the same weekend in October of last 2019. AMC has several levers at its disposal, and ticket sales are only one of them. High-margin concession stand revenues have increased as a result of enhanced snack options and a widespread adoption of mobile ordering across the chain.
AMC’s U.S. theaters have seen a 42 percent increase in food and beverage income per client in the last two years. The chain is therefore expanding beyond the theater sector. The amount of money spent per person is likewise growing substantially.
AMC share price has just come from a head and shoulders formation and has been on an uptrend. Over the past week, the MACD indicator has crossed above the signal line, showing market bullishness. If the buyers keep up the momentum, AMC shares could rise to the first resistance at 44.46 and the second one could reach to the level corresponding to the previous head section at 48.28. If the buying momentum wanes, the price could slip to the first support at 40.08 and further weakening could see the second support being established near the previous shoulder at 36.51.