AMC and GameStop shares hit multi-month intraday highs, then pull back

Shares of AMC Entertainment Holdings Inc. and GameStop Corp. traded well above levels that had capped previous rallies and hit multi-month highs in intraday trading on Tuesday, before pulling back later in the session.

The intraday rallies come after Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said the two “meme” stocks made his list of the 25 most “compressible” US stocks, or those that are most susceptible to a short cover rally.

AMC shares of AMC,
-1.09%
rose 7.7% to an intraday high of $17.82, before reversing the trend to slide 0.7% in afternoon trading. The stock closed Monday at its highest price since April 25.

The cinema operator’s stock gains over the past few months were capped just above the $16 level, until it closed at $16.54 on Monday to break above that resistance zone.

FactSet, MarketWatch

GameStop shares GME,
+3.45%
were heading for the highest close since April 20. They rose 7.0% to an intraday high of $156.84, before pulling back to rise 0.3% in recent trading.

The video game and consumer electronics retailer’s stock peaked in previous intraday breakout attempts at around $153, but each time closed well below those highs.

FactSet, MarketWatch

Meanwhile, S3’s Dusaniwsky provided his list of the 25 US stocks most at risk of a short squeeze or strong rally fueled by investors rushing to close losing bearish bets. Learn more about the mechanics of short selling.

Dusaniwsky said the list is based on S3’s “Squeeze” metric and “Crowded Score,” which factors in total short dollars at risk, short interest as a percentage of a company’s actual marketable float. , the liquidity of stock loans and the liquidity of transactions.

Short interest as a percentage of float was 19.66% for AMC, based on the latest short exchange data, and 21.16% for GameStop.

He said an additional variable that makes a stock “compressible” is substantial net funding losses relative to the market.

Over the past month, AMC shares have climbed 31.1% and GameStop shares have risen 8.8%, while the S&P 500 SPX Index,
+2.76%
gained 6.8%.

“[T]The odds of getting a pat on the shoulder from a risk manager to cut losses and exit a trade are higher for these stocks,” Dusaniwsky wrote in a note to clients. β€œThe greater likelihood that short sellers will be forced to buy to cover will only push stock prices even higher – and make the pressure even tighter for shorts still in action.”

AMC, which had about $1.50 billion in short interest still open, was 16th on Dusaniwsky’s list, and GameStop, with $1.92 billion in short interest, was 24th.

Read also: Short sellers raise bets against GameStop and AMC to highest level in a year as Wall Street sees more pain ahead.

Read more: AMC may have been a darling for meme stocks, but weakness in some key areas has put the company on shaky ground.

Meanwhile, the top 5 stocks on Dusaniwksy’s list were Faraday Future Intelligent Electric Inc. FFIE,
-17.31%,
Canoo inc. GOEV,
+1.01%,
Gossamer Bio Inc. GOSS,
+6.29%,
Verve Therapeutics Inc. VERV,
+22.73%
and Lightwave Logic Inc. LWLG,
+5.96%

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