Cinemark holds above support while AMC trades lower. Which stock to snap?

By: Motiur Rahman
Motiur Rahman
Md Motiur is a Financial Analyst at Invezz covering the North American, European and Asian stock markets. He has… read more.
on May 17, 2022
  • Cinemark and AMC posted robust first-quarter earnings.
  • Cinemark has held onto the post-earnings gains as AMC loses.
  • Investors should buy/hold Cinemark ahead of AMC.

Cinemark Holdings, Inc. (NYSE:CNK) and AMC Entertainment Holdings Inc. (NYSE:AMC) are two movie theaters. For an investor seeking exposure in the sector, fundamentals and trend momentum are key.

On fundamental aspects, Cinemark reported a new loss of $0.62 per diluted share in the first quarter. The loss was narrower than $1.75 per share in the prior year but slightly wider than expectations of $0.60. The revenue, nonetheless, exceeded estimates of $446.5 million after rising to $460.5 million.

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AMC also boosted its first-quarter results. The company narrowed net loss to $0.52 per share, compared to per share loss of $1.42 in the prior year. The loss was also narrower than estimates of $0.67. The revenue ballooned to an above-estimate $798 million, from just $148.3 million in the previous year.

Evidently, the quarter results imply that Cinemark and AMC are on course to Covid slump recoveries. However, Cinemark has been steadier compared to AMC.

Cinemark holds stead AMC drops further

TradingView

Technically, Cinemark has held above the support of around $14 since January. The support coincided with oversold conditions. The stock is currently retreating after moving higher following the quarter results. We believe Cinemark will continue to surge, building on the momentum of the quarter results. Investors should buy above $14 after the current retracement.

Conversely, AMC has failed to hold onto the momentum after the robust quarter results. The stock slid below a resistance zone at around $13 and is moving lower. The stock faces bearish pressure at the current level.

Summary

Cinemark and AMC are both recovering well from the pandemic dip. Cinemark holds above key support, while AMC trades below resistance. Buy Cinemark on a retracement to support and sell AMC.

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