Loading...
by Darius Anucauskas

Is Amazon Stock A “Buy” Again?

The recent market sell-off had its negative effect on many sectors, especially on the technology industry. Amazon stock (NASDAQ: AMZN) got hit as well, with the share price dropping heavily and wiping out around 70% of its 2018 gains. Now we can see that AMZN is pushing back up, with investors trying to find value in the shaken tech-giant.

From the technical side, looking at the daily chart, the stock is now forming something like a falling wedge pattern, which started from the end of September. Certainly, according to the theory, this tends to be a bullish pattern, but as long as the upper side of that pattern remains intact, the current move up is seen as a correction. The price structure still remains of lower highs and lower lows, hence why we will remain bearish over the medium term, especially if the upper side of the wedge continues to hold the price down. But from the very short-term perspective, to see some more recovery could be a good possibility.

A further push higher could test the key resistance area near the 1581 barrier, marked by the high of the 19th of December. Slightly above runs the upper side of the wedge, which could also provide good resistance. If the price struggles to move above it, AMZN might reverse back down, as investors could start abandoning the stock. If this then drags the price back below the 1485 zone, the break may clear the way again towards the 1364 obstacle, or even the 1306 support area, marked by the lowest point of December.

Alternatively, if a strong buying momentum results in a break of the upper side of the wedge and places the share price above the 1640 barrier, this may attract more investors. Such a move may clear the way towards the next potential area of resistance at around 1700, a break of which could lead to a re-test of the December high near the 1775 level.

Amazon daily

Disclaimer:

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Group, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Group analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD Group prohibits the duplication or publication without explicit approval.

68% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.

Copyright 2019 JFD Group Ltd.

 

WEEKLY FINANCIAL NEWSLETTER
RIGHT INTO YOUR MAILBOX!
SUBSCRIBE TO JFD'S STRATEGIC REPORT