![]() ![]() Readers previously were shown how to sell a bullish put spread to position for downside support to hold. My latest article on AMC stock recommended selling a bearish call spread to profit from a failure in the latest short squeeze attempt. This will serve to keep the downside limited over the coming quarters. While the fear may be fading for an upside rip, it is still there to some extent. AMC stock is consolidating at the $17 level, well above the prior consolidation point at $13. The downside, however, still remains unchallenged. This will likely limit any meaningful upside going forward, as exhaustion is setting in at a much quicker pace. It’s interesting to note how each failed attempt to rally AMC stock via a short squeeze resulted in a lower high. Source: The thinkorswim® platform from TD Ameritrade Its 14-day relative strength index (RSI) validates this consolidative pattern, as it hovers just below a 50 reading. Meanwhile, $13 is major downside support that held strong on several occasions. ![]() $30 is serious upside resistance level that has been firmly rejected on previous breakout attempts. Shares are mired in a well-defined trading range. But inevitably, it needs actual recurring cash generation to stay in business. The company will do whatever it takes to keep AMC stock up. Remember that AMC cashed in big-time on the original squeeze attempt back in May by issuing more than $1 billion worth of stock. ![]() CEO Adam Aron is willing to go to great lengths to keep the price of AMC stock from dropping. He, along with many others, was baffled by the deal. Alex Sirios from InvestorPlace noted the obvious lack of synergy in the deal. Previously, AMC entered into the mining business by taking a stake in Hycroft Mining (NASDAQ: HYMC). Yet shares initially popped more than 5% on the news anyway. AMC currently has more than 10,500 screens across the globe. The addition of seven movie theaters with 66 total new screens won’t make any kind of meaningful impact on the bottom line. InvestorPlace contributor Will Ashworth took a deep dive into why this move was window dressing at best. The most recent effort was an acquisition of seven theaters from Bow Tie Cinemas. AMC CEO Adam Aron is certainly not afraid to take creative - or possibly controversial - steps to support the AMC stock price. ![]()
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