Sunday, January 10, 2016

AMZN Amazon Monthly Chart

AMZN and NFLX are two power houses from last year and their strength will continue into early this year, however, both are likely setting up for a multi-year top, say, peaking out in February-April. The pink arrows show the tight standard deviation bands that jam price higher over the last year. Price has violated the upper band and needs to move back to the middle band, the 20 MA, at 439, and rising. The chart remains strong.

Amazon receives a spankdown last week due to the multi-year negative divergence with stochastics and money flow, and the VST slivers of neggie d with RSI and MACD. The histogram, stochastics and money flow want to see another high in price. AMZN should not peak until the indicators all roll over with negative divergence as price prints a new high. Thus, AMZN looks too tricky to short from here, and it is not worth going long. It is probably best to wait for price to peak in a couple months or so and as long as the negative divergence arrives, it will place a key top and move lower.

The ADX shows a continuing strong trend higher for price so it should take the first few months of the year to top out in price. It is never wise to short momentum stocks but Amazon may provide a chance for a less risky short early this year. 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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