Monday, November 9, 2015

AMZN Amazon Daily Chart Goes Parabolic

Jeff Bezos provides hearty laughter watching his fortune grow by billions as Amazon stock price goes parabolic. AMZN is up +10% in the last 10 days alone rising at +1% per day! Mall foot traffic continues to slow as consumers order more goods via Amazon. Price has momentum now and these levels should sustain for a couple months. The red lines show neggie d that wants a pull back right now but the long and strong MACD line and RSI should bring price up for one more look at current highs before rolling over for several days or a week or two of rest.

The monthly chart has juice remaining so the expectation is for AMZN to move through 600-680 into the new year and then likely print a long-term multi-year top in early 2016, at or under 680, but if this is taken out, then price will likely top out long-term at 720-730.

Price has violated the upper standard deviation band so the middle band at 596 and rising is in play as well as the lower band. Price is on an island above 600 so an island reversal pattern may occur from 600 down to 580 and lower in a flash, say, in early 2016. The pink boxes show that the price move higher is a strong trend higher. This trend was lost in early September but the Amazon bulls are running again which further enforces the theme of sideways at these elevated prices with an upward bias for a few weeks forward.

There is no compelling reason to chase a parabolic stock. Look at what happened to the traders chasing China higher a few months ago; the SSEC went parabolic and then reversed lower falling off a cliff; those traders chasing the upside hype were handed their heads on a platter. Also, a momo stock is rarely worth shorting so a short would not be considered say until the new year begins.

In years past, only commodities would behave with excessive parbolic moves higher followed by crashes but in recent years, as the central bankers have destroyed price discovery and normal functioning of capital markets, individual stocks and indexes are now behaving erratically like commodities. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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