Amazon Inc. (NASDAQ: AMZN) opened with a large negative gap on April 29th, distancing itself further from the tentative downside resistance line drawn from the high of April 4th. It then continued printing lower highs and lower lows and now it is close to the 2250 barrier, marked by the low of May 4th, 2020. Having all that in mind, we will consider the near-term outlook to still be bearish.
Even if the stock rebounds from near the 2250 zone, as long as it stays below the downside line, we will see decent chances for another leg south. Market participants may liquidate again from near the 2525 barrier, or the 2620 level, marked by the highs of May 3rd and April 29th respectively. The forthcoming slide may result in another test near 2250, the break of which would confirm a forthcoming lower low and could set the stage for extensions towards the round figure of 2000, also marked by the inside swing high of March 31st, 2020.
Shifting attention to our short-term oscillators, we see that the RSI is finding support near its 30 line, while the MACD, although below both its zero and trigger lines, shows signs of bottoming as well. Both indicators detect negative speed, but the bottoming signs add credence to the view of a potential rebound before the next fall.
Now, in order to start examining whether the picture has turned bullish, we would like to see a strong recovery and a clear break above 3005, a resistance marked by the inside swing lows of April 12th, 13th, and 18th. The stock will already be above the downside lien taken from the high of April 4th and may initially travel towards the 3175 zone, marked by the high of April 19th. Another break, above 3175, could extend the advance towards the peak of April 4th, at 3370, or the high of March 29th, at 3415.
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