The meme stock rally got stopped twice this week, both times by AMC and GME diluting their investors. I spoke with the TrendSpider team about the meme stock rally, and we have some similar ideas.

We both think that the meme stock rally hasn’t finished yet, but call options traders are getting wrecked first. The dilution from AMC and GME is actually bullish long term because both companies improved their financial positions. However, GME reported a significant decline in their financials, which should raise some concerns for GME investors. I personally think AMC is very undervalued under $10. The key problem has always been dilution, but it seems like the dilution has already occurred so there could be some upside.

I think AMC will rebound, but I think there will be some sideways price action within a range between $2.39 and $10.39. I marked an arrow on the chart on the previous cycle. I think we are too early at this point, and there is likely to be an accumulation range forming over the next few months for swing trading.

My strategy will be to exit on any upswings above my average entry price. I plan to re-enter my position around $2.39 or take any swing trade setups. We could still see a repeat of history with a strong rally, but as I marked on the charts I think we are still early. It is a good idea to swing trade and accumulate over the next few months.

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