has quickly ramped up by 15% in less than a month, the rally may
be coming to an end soon.
For the record, I've been extremely optimistic about AMZN in
the past (read more about that
). By now I believe the stock is likely to flounder in the short
term. However, I don't expect that decline to last long.
Moreover, this pullback will offer a great opportunity to enter a
In November, ChartWatch noted (blue arrows) that the shares often
reverse course near the 200-day moving average (black). At the
time, the stock was in freefall, but it quickly changed
direction. The 200-day moving average proved to be a great place
to buy AMZN
as the stock took off.
This chart shows the price of
shares along with an important resistance area to
The shares popped by more than 15% immediately following our
research report. AMZN also regained the 50-day moving average
(orange) in the process.
I'll be watching the 50-day closely over the next several weeks.
The shares are due for a pullback, especially as they approach
the $260 resistance level (blue line). Though a decline appears
likely, look for the 50-day moving average to provide support
around the $240 level. And should buyers defend that line, AMZN
is likely going to advance to a level above the recent $265 high.
Over the next few weeks, look for the stock to decline
(consolidate) by around 5%. This decline may be a sharp one, as
AMZN is a volatile stock. However, a quick decline, particularly
one on below-average volume, would provide bullish traders with a
fantastic entry price.
Equities mentioned in this article: AMZN
Positions held in companies mentioned above: