Uptrend Broken in AMR Corp. (AMR)

Shares of AMR Corp.

, the parent company of American Airlines, are lower on the session by 4.18%, currently trading at $6.87. The stock broke down through the 50-day and 200-day moving averages in mid-June and has been struggling ever since. Over the past four weeks, investors have been picking up shares as risk-appetites increased; this put AMR in a technical uptrend. Since contacting the 50-day moving average at the beginning of the month, the stock’s momentum has waned slightly, though it remained to be seen if the uptrend would remain intact. Today, however, we are gaining confirmation that risk-appetite for the stock has diminished; AMR has now been sold down through that uptrend. The immediate downside target for the stock is $6.32, then $5.50 if the $6.30 horizontal support level is broken. Traders can play this by selling the September $7.00 call and buying the September $7.00 put for a net debit of $0.15.