Amazon (AMZN): Preparing for a CorrectionWe need to zoom out significantly to get a clearer picture of Amazon. The stock has been in a maximal zone between $177 and $214. For the past three months, it has been ranging between $177 and $188, at the top of Wave B.
Current Situation:
Elliott Wave Analysis: We believe a substantial drop is necessary to complete the overarching Wave (2). The parallel trend channel that was broken with the completion of Wave 5 should be revisited to finalize Wave (2). This would be a textbook Elliott Wave behavior - breakout of a trend channel to complete the wave 5 as a fakeout and a deeper correction to flush some participants out of the market and into slight panic mode.
Target Range: We are targeting a range between $131 and $103 as a likely zone for this correction to end.
Ranging Behavior: Amazon has been ranging for three months, indicating consolidation before a potential move.
Strategy:
Observation Mode: We are currently observing the stock for signs of weakness.
Limit Order: A limit order will be considered if the stock begins to show significant downside momentum. If and when we decide to place a limit order, we will issue a detailed market report.
Amazon's current range suggests consolidation, but we expect a deeper correction to complete Wave (2) rather than a breakout to the upside. We are monitoring for signs of weakness and will place a limit order if conditions are met. For now, there is no immediate need to place an order. Further updates will be provided as the situation evolves.
