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by Charalambos Pissouros

Is Amazon Set for Another Round of Selling?

Amazon Inc. (NASDAQ: AMZN) has been trading in a sideways manner since the beginning of August, between the 1755 support level and the resistance of 1835. That said, in the bigger picture, the stock trades below the prior tentative upside support line drawn from the low of December 24th and thus, we would adopt a cautiously bearish stance for now.

A clear and decisive break below the lower end of the aforementioned range, at 1755, would confirm a forthcoming lower low and may carry bearish extensions towards the low of June 3rd, at around 1670. The share may stall around there or rebound somewhat but as long as it stays below 1755, we would see decent chances for another sell off. If the next negative leg leads the price below 1670, then investors may allow the stock to slide towards the 1585 area, which provided strong support between January 14th and March 8th.

Taking a look at our daily oscillators, we see that the RSI ticked down from slightly below its 50 line, while the MACD lies within its negative territory, above its trigger line, but shows signs it could start turning down as well. These indicators suggest that the downside momentum may start picking up again and corroborate our view for some further declines.

In order to abandon the bearish view, we would like to see a recovery above the 1870 zone, as well as above the upside support line taken from the low of December 24th. Such a rebound could set the stage for bullish extensions towards the 1960 zone, the break of which may open the path towards the peak of July 11th, at around 2037, or even the stock’s all-time high of 2050, which was hit on September 4th, 2018.

Amazon stock daily chart technical analysis


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