Scamazon reports last evening and the bulls were tripping over each other to buy the stock. AMZN popped +12% in an upside orgy so obscene it would make Caligula blush. Alas, minutes into the euphoria, weak guidance is provided and the stock tanks now down -3%. That is a 15 percentage-point move in the last few hours and AMZN has not yet traded in the regular session after the earnings.
The chart shows long and strong indicators except for the money flow. Thus, a few more weeks of upside would be expected until the neggie d forms to call the top on the weekly basis. The sogginess today may create negativity in a couple of the indicators to end this week but the MACD will probably still be long and strong wanting to see higher prices on the weekly basis.
The blue lines show a textbook C&H (cup and handle) pattern. You can fill it with coffee, tea, or booze if you are an alcoholic, and with the brim at 103.40 and bottom of the cup at 84.50 (difference of 18.90), the upside target is 122.30 if price moves above the brim at 103-104, and it did.
Price violated the upper standard deviation line at 111 so the middle band at 97 is in play. The middle band is rising sharply, and considering that there should be a back test of the breakout brim line, price may want to come down for the back test at 103-104 before moving higher again on the weekly basis.
The 50-wk MA is at 107.52 so look for a back kiss of this level as a given. Check that. Price is down to 106.33 in the pre-market down -3.3%. The 104 is not much further for the back kiss.
Remember, if you want to play a breakout from a C&H or inverted H&S (head and shoulders), you buy on the breakout, then you buy on the back kiss, then you buy when price moves higher overcoming the high from the initial breakout.
Amazon will be in focus today but the chart says today and maybe some of next week will likely be a back kiss of the C&H brim line, and then price should rally again on the weekly basis targeting the 122. The happy scenario will rot on the vine if price comes down for the back kiss and falls through 103-104 trending lower again but the indicators prefer up since they are long and strong with fuel in the tank.
Keystone does not own AMZN long or short currently but will look at the long side after the back kiss plays out for a few days and see if it looks good for an entry and potential run to 122. You can use the daily and 2-hour charts to time the bottom in the near-term when possie d forms (charts are negatively diverged now for a few days of down ahead). AMZN is likely not a long buy until the back end of next week or the following week. 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.
Note Added 4/30/23: AMZN ends the week at 105.45. LOD Friday was 104.33 a 104-handle. The 20-day MA that is also the middle standard deviation band at 103.34 is on the table. The brim of the cup of the C&H is 103.40 and needs a back kiss. The 50-week MA is at 107.43 right where Scamazon opened on Friday morning so this is a key level to watch over the coming days. It would be a big positive for AMZN when/if it moves back above 107.43.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.