Amazon (AMZN)

My last article for Amazon (AMZN) was several months back, it was titled “Amazon (AMZN) 11/15/2016 – Buy The Pullback?“. In that article, I looked at 2 different bullish scenarios as well as 1 bearish outcome.

A Trendy Stock Charts member appears to have bought some shares before my previous AMZN article (congratulations!) and recently asked about any potential patterns for AMZN’s share price that may be developing.

I think its probably best to review each of the scenarios that had the potential to develop in the previous article and see which of the 3 may be coming to fruition. Each of the 3 scenarios were longer-term scenarios. A check-up now should provide some additional clarity on the charts and narrow down the price projections….hopefully….

AMZN – Downside Risk

The section labeled downside risk in the previous article can be eliminated. That scenario did not play out. That means I should look for the results of either bullish scenario #1 or #2 to finish playing out.

AMZN – Bullish Scenario #1

This is a 5 year monthly chart for Amazon (AMZN). This chart best serves to update bullish scenario #1 from my previous Amazon  article.

The confluence of Target Lines from the blue and black Fibonacci Extension Tools around the $900 area suggest some stiff resistance. I suggested a $900 – $925 upside price target in my previous update. Normally the confluence of Target Lines would be a good area to take some profits based on reaching the 161.8% Target Line from the black Fibonacci Extension Tool, which is the longer-term trend.

Sometimes you get a poke-through on the shorter-term trend. A poke-through on the shorter-term trend would be a quick break above the 100% Target Line from the blue Fibonacci Extension Tool. That is where the $925 price target comes into play. Expect stiff resistance around the $900 area though.

Analyzing a Long-Term Chart and Price Objectives for Amazon (AMZN)

AMZN’s share price did not close above the resistance area from the Dark Cloud Cover candlestick pattern in February 2017. It came really, really close. But the resistance area from the candlestick is $847.21; AMZN’s share price closed February 2017 at $845.04, just slightly below the resistance area.

However AMZN’s share price appears poised to move above the resistance area this month. The question now is, will its share price be able to close above the resistance area?[s2If !current_user_can(access_s2member_level1)]….

If you want to continue reading this article for Amazon (AMZN), you must first login. I finish discussing upside price targets for Amazon’s share price as well as warning signs that I see indicating its uptrend may be almost over if not over already.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] The MACD Histogram still shows buying momentum. But each leg upwards has less buying momentum than the leg before. That indicates a tired rally.

AMZN – Bullish Scenario #2

This 3 year weekly candlestick chart helps to illustrate price targets from bullish scenario #2. It involved AMZN’s share price breaking through the cluster of Fibonacci Extension Tool Target Line in the $860 – $925 area and proceeding to the $1,100 area.

Analyzing Very Bullish $1,100 Price Targets From Aggressive Fibonacci Extension Tools

Bullish scenario does not look likely. If it does play out, I would first anticipate a new high this week. Then, AMZN’s share price would need to close around the $900 area within the next 3 weeks at the latest. AMZN’s share price should be closing near its highs for the week on a weekly chart over the next 3 week period as well.

AMZN – Moving Averages

This is a 1 year daily candlestick chart to wrap up the analysis for Amazon (AMZN). The Fibonacci Extension Tool placed on this chart has a little less upside target than bullish scenario #1 above. It also shows 2 bearish reversal candlestick patterns that developed on its daily chart – a Northern Doji candlestick pattern and a Bearish Engulfing candlestick pattern.

Analyzing Bearish Candlestick Patterns in Relation to Price Targets from a Fibonacci Extension Tool While Supplementing the Chart with Trendlines

The above average selling volume for the Bearish Engulfing candlestick pattern does not bode well in the short-term for AMZN’s share price.

AMZN’s share price seems to be having a difficult time gaining traction above its breakout area. The breakout area is identified by the red horizontal trendline. If AMZN’s share price does not re-take the breakout area this week, I think another trip to at least the 50 Day moving average, if not the 200 Day moving average, is probable.

If it does re-take the breakout area, look for the 20 Day moving average to continue providing support during the process. A break of the 20 Day moving average indicates a 50 or 200 Day re-test.

Amazon (AMZN) – Summary

The bearish candlestick patterns on AMZN’s daily chart seem to indicate that bullish scenario #1 is the more likely scenario. As always though, it is important to monitor the share price at all times.

As AMZN’s share price approaches the price target area from bullish scenario #1, look at the MACD Histogram on its weekly chart. Is the MACD Histogram still showing buying momentum that is decreasing? If so, then trimming shares and locking in some gains is prudent.

However if the MACD Histogram is showing increasing buying momentum, then maybe, just maybe, it could be an indicator that AMZN’s share price could be attempting to sketch out bullish scenario #2. It seems to work best when you plan for the worst and then hope for the best.

As always, drop a request in the Idea Chamber also if you want an update or things start going awry from the plans.

Good luck trading!

On Deck: Delta Airlines