An analysis of Amazon (AMZN)’s charts on Monday identified a near-term potentially bullish formation juxtaposed against a tricky, potentially dangerous intermediate-term set up.
From a near-term perspective, AMZN on its hourly chart appeared to be putting in a “falling wedge”-type pattern (the opposite of a rising wedge), which usually represents a trend-ending formation. In this case, it would be the conclusion of the correction off of the July 27 high at 1083.20 to Monday’s low at 942.25.
Often times, the end of the falling wedge will come in the form of one final down-spike beneath the lower wedge boundary line, into marginal new reaction low territory, say beneath 940, into the 936 area, followed by a vicious upside reversal spike and the initiation of a powerful rally that will propel AMZN above 953-960 resistance to confirm the turn. From a near-term perspective then, AMZN should be getting ready for a tradable upmove. (more…)