PreMarket Prep Stock Of The Day: AMC Entertainment

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Of all the meme stocks, there's one that's a sentimental favorite to many. That being AMC Entertainment Holdings AMC, for the simple reason that the full reopening of movie theaters may mean the worst of the pandemic is behind us.

Long-Term Trend Is Not Your Friend: AMC made its Wall Street debut on Dec. 18, 2013, and ended its inaugural session at $17.35. The following day it put in a low at $17.26, a low that wasn't breached until August 2017.

In the interim, the issue made its all-time high in March 2015 ($34.59) and revisited that area in November 2016, when it came just shy only reaching $34.10. Over the next year, it swooned to $9.25. Interestingly, the rebound off that low peaked at $20.70 in September 2018, which is just shy above where it peaked in January ($20.36).

Timing Is Everything: If you didn't dabble in the issue until the March meltdown last year, you could have purchased the issue for under $2, when it bottomed in back-to-back months at $1.95.

If one didn't exit the issue in September when it peaked at $7.71, one would have had to ride the issue down to a new all-time low in January at $1.91.

See also: How to Buy AMC Stock

Reddit And WallStreetBets: During the short squeeze-mania, AMC fully participated. After ending the Jan. 21 session at $2.98, it crept up to $3.51 the following day. Two days later, it crossed over $5 and ended just off that level at $4.96.

On Jan. 27, it went into full rocketship mode blasting $20.38 on monster volume of 1.25 billion shares. It ended the session at $19.90 and hasn't sniffed that level ever since.

The curtain came down on the issue on Jan. 28, aided by buying restrictions put in place on Robinhood and other brokerage platforms. In a volatile session, the issue peaked at $16.50 and bottomed at $6.53. It rebounded off that low to end the session down 56% at $8.63.

Built A Base And Moved Higher: In mid-February, the issue put in a series of 10 consecutive lows in the $5.26-$5.75 range and began to move higher. In another round of madness in Wednesday’s session, the issue peaked at $12.47 but ended the session at $9.85.

Q4 Report And Price Action: As expected the company posted dismal fourth-quarter results with an adjusted net loss $(3.15) versus the $(1.18) estimate and adjusted sales of $158.9 million. On the bright side, the company said it's no longer in "survival" mode with vaccine rollout coupled with big movie releases on the horizon.

After a higher open, AMC rallied to $10.87 and reversed course. As of 1:30 p.m. ET, it's attempting to find support above Wednesday’s low ($9.51) as $9.90 stands as the low for the session.

Moving Forward: Unfortunately, AMC was already in a prolonged downtrend long before the pandemic began. With the transformation to digital entertainment in full bloom, it's hard to imagine movie theaters regaining their former glory.

But in the current market environment, anything can happen. For investors trading it technically, staying above the cluster of lows at the $5.50 area is a must-hold level. On the upside, if the issue can rebound and take out Wednesday’s high ($12.47), there's no daily resistance until its Feb. 1 high ($17.25).