The 60-day moving average has had bearish implications for the equity in the past
While the shares of AMC Entertainment Holdings Inc (NYSE:AMC) have certainly fallen from the highs seen during the height of the meme stock craze, a small rally recently took place on the charts. In fact, in the last week, AMC managed to take on around 7%, breaking above pressure at the $13 level as a result. The recent pop may have helped the equity chip away at a more than 50% year-to-deficit, but its also pushed AMC right into its historically bearish 60-day moving average -- a trendline that's resulted in downside for the equity in the past.
In a study conducted by Schaeffer's Senior Quantitative Analyst Rocky White, this signal occurred five other times during the past three years. One month later, the stock was lower 60% of the time, averaging a 12.1% drop. Some of this may already be in effect, as the equity was last seen down 4% to trade at $13.56 this afternoon.
An unwinding of optimism could put additional pressure on AMC Entertainment stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AMC sports a 50-day call/put volume ratio of 2.58, which ranks higher than all of readings from the past 12 months. This is indicative of a healthier-than-usual preference for calls of late.
Echoing this, the equity's Schaeffer's put/call volume ratio (SOIR) of 0.43 ranks higher than just 2% of readings from the past year. In other words, short-term options traders are much more put-biased than usual at the moment.
Speculating with options looks like the way to go, as premium can be had for a bargain. This is per the security's Schaeffer's Volatility Index (SVI) of 129%, which sits in the low, 25th percentile of its 12-month range, suggesting options traders are pricing in relatively low volatility expectations for the security at the moment.