AMC Entertainment Holdings, Inc (NYSE:AMC) is ticking higher again on Tuesday. On Monday Benzinga reported options traders continued to slap the ask on bullish call contracts. Together, the traders bet over $1.9 million AMC would trade higher and they were right.
On Tuesday, options traders were mixed and a number of bearish puts were purchased although in total, more money was placed on calls. At 9.52 a.m. one option trader paid a whopping $437,500 for a single order of calls with a strike price of $37 expiring Sept. 10. The trade was for 680 AMC options at $5 per piece.
The bearish traders may have noticed AMC rejected and wicked from an upper resistance level near the $39 mark.
See Also: How to Buy AMC Stock Right Now
The AMC Chart: AMC reached a low near the $29 mark on Aug. 5 and Aug. 11, which created a bullish double bottom pattern. The stock then rebounded and headed north over 32% before slamming into the upper key level of support and resistance.
Although AMC has already made a massive move higher over the past four trading days, its relative strength index is measuring in at a very comfortable 50%. This indicates AMC’s stock could rise much higher still without entering into overbought territory above the 70% level.
AMC was able to regain support of the eight-day and 21-day exponential moving averages (EMAs) on Tuesday after being pinned between the two EMAs on Monday. The eight-day EMA is still trending slightly lower than the 21-day which is bearish, but the eight-day has begun to curl upwards and with continued momentum looks set to cross back up above the 21-day EMA.
If AMC closes the trading day near the $38 mark it will avoid printing a shooting star candlestick, which could indicate a period of consolidation was needed. Bulls will want to see AMC close near its high-of-day, which will cause it to print a bullish Marubozu candlestick and could indicate higher prices will come again on Wednesday.
- Bulls also want to see big bullish volume push AMC back up above the $39 level. If it can regain the level as support, it has some mild resistance at $43 and $46.
- Bears want to see bearish volume come in and knock AMC’s stock down below the eight-day and 21-day EMAs. If the stock loses the levels as support, it could revisit $31.81.
