Fear Selling Or Manipulation? AMC Entertainment Stock Plummets To 6-Month Low

AMC Entertainment Holdings, Inc AMC was plummeting over 17% on Monday after breaking bearishly from a bear flag pattern on the daily chart that Benzinga called out on Friday morning.

Insiders have been on a selling spree recently with CEO Adam Aron and CFO Sean Goodman cashing out a combined $10.2 million in stock on Dec. 7. Insider selling is often viewed as negative because it can indicate executives have lost faith in the company although Aron took to Twitter to announce he was diversifying his assets for estate planning.

Insiders have sold more than $70 million worth of stock so far this year, which may have caused some traders to begin exiting their positions, although the community on r/amcstock believes the price is being manipulated by hedge funds to shake out retail traders.

Regardless of the reason, traders may want to be aware of the levels and patterns on AMC's chart, as they plan their strategy.

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The AMC Chart: AMC fell through a key support level at the $25.79 mark. The stock hasn't traded below the area since May 27 and the area may now act as heavy resistance.

• The move lower happened on higher-than average volume, which indicates fear has gripped some traders and investors. By late morning, over 30 million shares had already exchanged hands compared to the 10-day average of 48.44 million.
• The stock is trading in a confirmed downtrend, with the most recent lower high created on Dec. 8 at $33.92 and the lower low printing on Monday below the Dec. 3 low-of-day at the $25.31 level. 
• AMC’s relative strength index is measuring in at about 30%, which puts the stock into overbought territory and can be a buy signal for technical traders. This may indicate AMC is due for at least a bounce in the near future.
• The stock has resistance above at $25.79 and $29.45 and support below at $20.36 and $17.07.