Amazon.com, Inc. (AMZN) - Technical Analysis PublicationMarket Sentiment and News:
AMZN has recently made headlines with a record number of same-day and next-day deliveries, an operational milestone that may reflect positively in investor sentiment. With the earnings report slated for tomorrow, the market's focus is honed in on Amazon’s financial health and future guidance.
Price Action Analysis:
Over the recent trading period, AMZN has displayed a pattern of higher highs and higher lows, which is the hallmark of a bullish trend. The recent pullback has found support above the Ichimoku Cloud, indicating underlying bullish sentiment.
Ichimoku Cloud:
The price has rebounded off the Ichimoku Cloud, affirming the Cloud as a dynamic support level. The conversion line (blue) remains above the baseline (red), which supports the continuation of the uptrend. However, traders should monitor the cloud for any signs of a color change which may indicate weakening momentum.
Fibonacci Retracement:
The price found support near the 0.382 retracement level at $172.30, presenting a potential buying opportunity for swing traders. The bullish target is set at the previous high of $189.77, with a speculative extension towards the $200 psychological level.
Bollinger Bands:
The recent price candle has bounced off the lower Bollinger Band, suggesting a potential reversal from the oversold condition. The middle band, currently at $181.46, could act as the immediate resistance level.
Moving Averages:
The exponential moving averages (EMAs) for the 20, 50, 100, and 200-day periods are trending upward, with the price recently testing the 50-day EMA as support. A sustained price above the 50-day EMA ($176.35) is crucial for the continuation of the uptrend.
Pivot Points:
Pivot point analysis suggests that the stock is currently facing resistance at the R1 pivot level ($184.11). A decisive breakout above this point could propel the price towards the R2 level at $188.08.
Technical Indicators:
RSI (Relative Strength Index): The RSI has recovered from near the oversold region and is currently below the overbought threshold, providing room for upward price movement.
Stochastic Oscillator: The Stochastic lines have crossed upwards out of the oversold region, which could indicate the beginning of a bullish momentum.
MACD (Moving Average Convergence Divergence): The MACD line is below the signal line but appears to be converging, hinting at a potential bullish crossover in the near future.
OBV (On-Balance Volume): The OBV shows a slight upward trend, suggesting accumulation, a positive sign for bulls.
Price Prediction and Trading Strategy:
For traders, a conservative entry point could be set around the 50-day EMA at $176.35, with a stop loss just below the recent swing low at $170. Swing traders might target a sell point at the previous high around $189.77, or hold for a break above $190 with speculative targets at $200.
Conversely, should the price breach below the recent swing low of $170, it may indicate a deeper correction or reversal, thus serving as a signal to exit long positions.
Conclusion:
As AMZN approaches its earnings report, the market could witness increased volatility. Technical indicators and price action suggest a bullish outlook, but traders should remain vigilant and prepared to adjust positions based on post-earnings market sentiment and price reactions. Risk management remains paramount, given the unpredictability of market movements around earnings releases.
