Saturday, January 14, 2017

AMZN Amazon Monthly Chart

Amazon is a powerhouse that took the holiday retail sales prize this year. Online shopping has increased as much as +18%, in a couple of studies, year-on-year, and Amazon receives the bulk of that love. CEO Bezos sits on bags of money as the stock price rises from the March 2009 low when former Fed Chairman Bernanke started pumping stocks higher with easy  money.

The rising wedge, overbot conditions and neggie d across all indicators (except for the MACD line) guranteed a spank down. That occurs but price recovers +9% in January heading higher to honor the long and strong MACD line. The top band is in play at 887. The Amazon joy is very long and overextended now. A  move lower to the middle band, the 20-mth MA, at 663, is on the table.

The ADX remains elevated at 45 so the strong upward trend in price that began in late 2009 continues, however, note that as price makes a higher high over the last year, the ADX does not; it negatively diverges lower. Do not get caught up in the Amazon hype.

Amazon is topping out as is the other high-flying stocks such as AAPL, NFLX, FB, GOOGL, ULTA, etc...  AMZN will likely print a multi-year top during the first half of this year at the 820-880 range. 

If AMZN tags that 840-ish area where the prior high occurred, and the indicators negatively diverge (thin red lines), that will lock in the smack down going forward. Of the high-flyers, NFLX, ULTA and GOOGL are likely to roll over first early this year followed by AAPL and FB then AMZN. All stocks are expected to print multi-year tops in early 2017 perhaps AMZN may slip into Q2.

You do not want to own this stock. If long, it is likely prudent to scale out going forward and just let that money sit to the side in cash. 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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