AMZN - Weekly RSI divergence disappeared...
Hello Everyone! The divergence spotted early June on 1H, 4H, D and W timeframes did not take place.
Amazon is showing a strong momentum bouncing on the 20 sma on its daily timeframe.
Aldough on shorter timeframes divergence is still in place, on W timeframe the RSI divergence disappeared after the recent rally, the indicator is in overbought level at a value of 80, than, how to act ?
An overbought condition does not mean that tomorrow the price will start to decline, it might remain overbought for a certain amount of time, let's enjoy the ride as expensive can get more expensive, on the other hand we do know that price cannot go up in a straight line without retracement, and when price is too far from its 20 sma it is a signal of a potential down move.
Whether this move will happen sooner or later we will see, in case of a strong down move it is possible the price will go under the 20 sma and reach the previous area of resistance between 2047 - 2182 which will likely become new support area.
Thanks for reading and...may the market be with us!
Amazon is showing a strong momentum bouncing on the 20 sma on its daily timeframe.
Aldough on shorter timeframes divergence is still in place, on W timeframe the RSI divergence disappeared after the recent rally, the indicator is in overbought level at a value of 80, than, how to act ?
An overbought condition does not mean that tomorrow the price will start to decline, it might remain overbought for a certain amount of time, let's enjoy the ride as expensive can get more expensive, on the other hand we do know that price cannot go up in a straight line without retracement, and when price is too far from its 20 sma it is a signal of a potential down move.
Whether this move will happen sooner or later we will see, in case of a strong down move it is possible the price will go under the 20 sma and reach the previous area of resistance between 2047 - 2182 which will likely become new support area.
Thanks for reading and...may the market be with us!
Related publications
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.