I did well trading AMZN last year for what I thought were possible 3-5 day bullish moves. I typically look for expansion phases that are beginning or about to begin when I have looked for these bullish moves. Here is what I am seeing currently …
AMZN – Daily Chart
The daily chart has set-up what looks like at first glance a nice bullish consolidation pattern (a pennant or wedge). The Trend Strength histogram has pulled back from an extreme trend strength warning, and is now in a spot that gives better odds to an expansion phase beginning. The Relative Strength indicator on the right shows that R/S is also making a bullish consolidation pattern similar to price … so all is fine for bulls to play for a 3-5 day move higher here in early 2018 right? Well, don’t forget to check your odds of the daily chart pattern with the weekly chart …
AMZN – Weekly Chart
The best daily chart setups occur when the weekly chart is pushing in the same direction. Can we say that here with AMZN? Actually, I think that odds of a relatively big daily chart move to the upside are not great odds wise here in early 2018. The price momentum on the weekly chart is relatively stretched to the upside so the weekly chart could actually be losing steam here early in 2018.
That weekly chart could lead to chop on the daily chart, while the bigger time frame consolidates and builds up energy for the next push higher. All-in-all, I think I will stick to intra-day trading AMZN here early in 2018, both to the upside and to the downside as well when the charts are lined up for a good intra-day move.
Always try and confirm the daily chart with the weekly when considering multi-day positions. If you are trying to swing a trade positon for several weeks, then that monthly chart has to give you the go-ahead as well.
Cheers … Leaf_West