Amazon (AMZN) - Potential H&S Reversal, Watch for BreakdownOverview:
Amazon (NASDAQ: AMZN) appears to be forming a Head and Shoulders pattern, which is often a bearish reversal indicator. The left shoulder, head, and right shoulder are clearly defined, with the neckline situated near the $180-$176 zone. If the price breaks below this area, it could signal a larger move downward.
Technical Setup:
Pattern: Head and Shoulders
Neckline Support: ~$180 - $176 (critical support area)
Trendline: Red ascending trendline, currently serving as additional support
Target Zone: Potential drop toward $168 or lower if the pattern confirms
Price Action:
The recent pullback from the right shoulder aligns with the overall pattern, and a daily close below $176 could confirm the reversal.
Watch for a bounce off the neckline for a potential short-term trade; otherwise, a breakdown could lead to a deeper correction.
Risk Management:
A sustained move above the right shoulder (~$190) would invalidate the bearish setup and suggest a continuation of the uptrend.
Catalysts:
Upcoming earnings and market sentiment around consumer spending could influence the stock’s direction, potentially acting as a catalyst for the breakdown or reversal.
