Will breakout hold
Amazon broke out to the upside on July 6th from a year long consolidation. Typically after such breakouts price does come back down to test what used act as a resistance, in this case $3550, to establish support there.
I haven’t been completely sold on this breakout, because from technical point of view it looks awfully similar to Apple’s false breakout earlier this year (see linked my analysis on it). But question becomes whether $3550 support level holds; if price bounces off of $3550 and goes up, upside is huge considering how large consolidation range was. But if price closes below $3550, there would be a good chance of stock retrieving to $2400, possibly even $2000. If so, I don’t expect an immediate drop; it would take some time to get there, as there are a lot of resistance levels in $2900-$3500 range.
I am neutral at the moment on the direction, will have to see how stock acts over next few days.
I haven’t been completely sold on this breakout, because from technical point of view it looks awfully similar to Apple’s false breakout earlier this year (see linked my analysis on it). But question becomes whether $3550 support level holds; if price bounces off of $3550 and goes up, upside is huge considering how large consolidation range was. But if price closes below $3550, there would be a good chance of stock retrieving to $2400, possibly even $2000. If so, I don’t expect an immediate drop; it would take some time to get there, as there are a lot of resistance levels in $2900-$3500 range.
I am neutral at the moment on the direction, will have to see how stock acts over next few days.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.