Amazon Inc. (NASDAQ: AMZN) traded higher yesterday, after it hit support at 3290 on Monday. Overall, the stock continues to trade above the upside support line drawn from the low of June 29th, 2020, something that keeps the broader outlook positive.
A clear break above the high of October 20th, at 3460, may pave the way towards the high of September 9th, at 3550, the break of which could carry larger bullish implications, perhaps paving the way towards the high of July 26th, at 3710, or even towards the all-time high of 3775, hit on July 13th. If market participants are not willing to stop there either, then we may see them pushing the action towards the psychological round number of 4000.
Looking at our daily oscillators, we see that the RSI turned up and ticked back above 50, while the MACD lies fractionally above both its zero and trigger lines. Both indicators suggest that the stock has started to gain back upside speed, which supports the notion of further advances in the not-too-distant future.
In order to abandon the bullish case, we would like to see a drop below 3130, a support marked by the low of May 13th. Such a move will not only confirm the break below the aforementioned upside line, but also a forthcoming lower low on the weekly chart. The next stop may be at 2945, a zone which acted as a strong support July 2020 and February 2021. If there is no buying interest near that area this time around, a break lower could pave the way towards the inside swing high of June 21st, 2020, at 2800, the break of which could carry extensions towards the low of the day after, at 2630.
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