AMZN … Now What?

In my post dated January 2, 2018, I noted that AMZN was sitting right in a spot where traders should expect a positional move in the stock (click here to review that post).  Here is the daily chart from that post …

AMZN -Daily Chart (from Jan 2/18)

I stated that the AMZN set-up on the daily chat was clearly bullish but that the weekly chart was not really showing me that a swing trade for several weeks was a high-odds trade.  My preference was to just intra-day trade AMZN to the upside and at most take a 25% normal sized swing position overnight if any at all.

Well, AMZN did infact begin the expansion move I could see setting up, and the weekly chart is now in a very interesting place on the charts.  First let’s take a look at how an updated daily chart looks …

AMZN – Daily Chart

The daily chart looks great … R/S also broke out of its consolidation pattern so all is good with this push higher.  Here is the 195-minute chart

AMZN – 195 Minute Chart#1

AMZN – 195 Minute Chart#2

Those charts look a bit extended to me so let’s look at the more important variable … i.e., where bigger resistance comes into play on the weekly charts …

AMZN – Weekly Chart #1

The weekly chart has pushed so far so fast, that my software is painting the candles with a light blue color … that is a warning telling me one of two things.  Those light blue candles mean that price has moved far from the historical moving average and that implies that either we are “kicking-off” a potentially big move, or alternatively, we are making what can be labeled as an “exhaustion” type move typically seen near the end of strong trends.

The Trend Strenght Histogram is just short of the 100 level which is where the “extreme” trend strength warning zone begins … I think that tells me that we are not kicking off a bigger move but in fact, probably getting very near the end of a weekly price structure/move higher.

Where is resistance on the weekly chart?  Most traders have no idea because we are hitting new all-time highs with the stock …

AMZN – Weekly Chart #2

The broadening price pattern on the weekly chart actually paints a nice series of resistance/support levels.  As you can see above, price has pushed right into that upper resistance line.

AMZN – Weekly Chart #3

Next week is OpEx and possibly a good intersection of both time and price to mark a short-term or longer top for AMZN.  Earnings are due after the close on February 1st, and what we are seeing right now may be part of the overall push higher leading into that report.

Bottom Line – I didn’t make the most out of this expansion move as I would have liked, but I think the move off of the ultimate high that is registered the next couple of weeks could be nice and violent as bulls get whipped sawed and have their stops taken out.

Cheers … Leaf_West

Leave a Reply