This is exactly why you should never buy into blind-momentum meme stocks, like AMC.

As we noted on May 14, “Over the last few days, shares of AMC Entertainment (AMC) soared from a low of $2.90 to a high of $11.88. All as Roaring Kitty sparked a flurry of meme stock-buying activity. And while it’s been fun to watch AMC scream higher, we wouldn’t touch it. After all, AMC could come down as fast as it went up.”

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On May 14, AMC had just rallied to an intraday high of $11.88 from a low of $5.85. Earlier that week, it traded at about $3. Those that chased AMC, hoping it would push even higher, were left holding the bag, as it sank to a recent low of $4.40.

Unfortunately, AMC is likely to head right back to $3, or less, burning the bag holders.


Ian Cooper