The meme stock run of 2021, well, let’s just say you had to be there! And to everyone’s surprise (and to no surprise of some long term investors who have been patiently waiting), AMC and GME made a 2024 comeback that left the market completely shook in disbelief.
If you are an OG meme trader you would have witnessed some of the craziest price action; I specifically remember AMC going from $1 to $21 back down to $5 all the way back up to $72 in just a few weeks time (pre-split / reverse-split).
And you know what they say: what goes up, must come down. Any meme bull and newbie trader aka “Dumb Money” post-2021 run was in for quite a long lull of disappointment (and shorting!). But in a shocking turn of events, the stocks have made a (inevitable?) comeback, AMC running to $12s from its $2.39 bottom, and GME running to $64.83 with its respective bottom $9.95.
So literally everyone and their mother is wondering: what’s next for the meme stocks? I like to remain realistic in my targets (it’s easy to get caught up in the euphoria!), but I do think both stocks have room for bigger moves after this surprise run and based on the short interest analysis as of 4/30 (probably changed by now on 5/20 with the next update on 5/31).
GME
Number of Shares Short: 64,373,343
Number of Shares Short +/-: +4,418,851
Short Interest Ratio: 17.36
Short Interest Ratio +/-: +4.63
% of Float Short: 24.12%
% of Float Short +/-: +1.64%
S3 Partners Squeeze Score: 65
If you were lucky enough to spot the volume on May 2nd when GME was still trading under $12, you would have caught one of the craziest 10-day moves I have seen from a stock in a while, especially one as hated as GameStop (everyone loves to hate!). But you cannot deny the fact the company did make a major turnaround becoming profitable and sitting on over $1B cash (not to mention, there’s over 3 billion gamers worldwide!). Now after reaching a peak of $77 in extended hours and $64 intraday, it seems to have found a local bottom around $19-20ish. In addition there is a golden cross about to kiss if the 50DMA can get above $15.47. If GME can get back above its 10DMA $25.95 and close above, bulls can get excited for seeing $30s and beyond again. However it must hold above $15. This week 5/20-5/24 bulls should be looking for first a close above the main resistance $23-24 and then the 10DMA. I am leaning bullish based on the volume of the last two trading sessions.
AMC
Number of Shares Short: 55,449,039
Number of Shares Short +/-: +4,763,615
Short Interest Ratio: 2.78
Short Interest Ratio +/-: -.01
% of Float Short: 20.13%
% of Float Short +/-: +.81%
S3 Partners Squeeze Score: 25
AMC has been a painful stock to watch the last couple of years; with all of the dilution and reverse-splits and endless negative sentiment on social media, holding this stock as a long has been considered some form of cruel and unusual punishment. But just like its chart twin GME, on 5/3 it had a turnaround in volume that eventually lead to a run of almost $12 on 5/14. Now bulls are waking up after a long slumber as it broke its 50DMA for the first time in almost a year. It has yet to break its 10DMA support the last 6 sessions, and had a 10DMA crossover to the 50DMA on 5/7 which has me leaning bullish. If it can close above the previous resistance from 5/13 at about $6, I could see this trading back above 10 in the next couple of weeks. After $6 the next resistance is the 200DMA which is about $8.27. Bears are looking for a close below $4.37 to see back to sub $4. If it does get back to the previous high of about $12, I do believe bears could be in a bit of trouble.