The Arc of Amazon AMZN and Planned Pullback October 10
Mon, Oct 10, 12:11 PM ET, by Corey Rosenbloom
Amazon (AMZN) shares are forming another Arc Pattern into the $845 per share level.
What does this mean and what’s the plan to trade the next immediate swing? Let’s see.
Amazon (AMZN) shares are in a confirmed and persistent uptrend.
We like to identify “Strong Stocks Getting Stronger” and buy pullbacks in strong uptrending stocks.
Amazon shows us numerous examples of successful pullback (retracement) trades along the way.
But what’s going on right now?
We’re seeing another over-extended swing to the upper Bollinger Band as a price “arc” develops.
This suggests that the next immediate swing will be a pullback toward the rising 20 day EMA at $820.
Here’s the pattern developing on the Intraday Chart – with enhanced negative divergences:
The most recent pullback (in the context of the Daily Chart Uptrend) took shares toward the $760 level.
A positive divergence – at a buy zone – was the catalyst that sent shares soaring higher, continuing the uptrend.
However, price is overextended and negatively divergent in both volume and momentum into the $845 level.
If you’re super aggressive, you can short a potential pullback “down away from” the $845 pivot.
Otherwise, wait for price to pull back – avoid buying shares here – and consider another buy strategy at a more favorable lower level such as $820.
Either way, it should be fun to watch – and perhaps trade – the pullback or ‘unexpected’ breakout beyond $845!
Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
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Corey's book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
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