Amazon.com, Inc. (NASDAQ:AMZN) could turn into a technical treat for bears in the coming weeks

Amazon.com, Inc. (NASDAQ:AMZN) could turn into a technical treat for bears in the coming weeks

Amazon.com, Inc. (NASDAQ:AMZN) could turn into a technical treat for bears in the coming weeks

A recent wake-up call, market seasonality, and lagging share price for Amazon (NASDAQ:AMZN) could turn into a technical treat for bears in the coming weeks. But with no guarantees of repeat performances, grizzly AMZN stock investors looking for more of the same need to suit up wisely. Let me explain.

The month of October is notorious for its history of swift market corrections. But so far 2019 has proven more volatile than overtly bearish. In fact, after swinging to a loss of around 3% early on in the first trading week of the month, the large-cap and tech-heavy Nasdaq Composite finished up 0.95%.

What’s more, the index closed in a bullish hammer narrowly above last October’s high just prior to the market’s deep correction which lasted until the end of December. Not bad, right? And with AMZN stock finishing in a similar hammer of 0.82% for the week, it was a good one for Amazon investors as well.

Nevertheless, to call an end to 2019’s bear could be premature with the month of October just underway. And when looking at the Amazon stock price chart, the technical story still appears to favor lower prices and continued profits for bears.

As stated, last week was a good one for bullish AMZN investors. While Amazon stock has lagged the NASDAQ and large-cap peers Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) in recent months and remains well-removed from its own all-time-high set a year ago, the five day period did result in a higher low variation of a double-bottom supported by the 50% retracement level.

All told, there’s obviously decent evidence AMZN stock’s relative weakness could be behind it and higher prices await Amazon shareholders. First things first: Bullish pattern confirmation is 0.90% above Friday’s close as the AMZN stock price will need to reclaim $1,756, which is marginally above last week’s high. That almost seems like a given, but I’m not overly keen on Amazon’s ability to rally strongly and maintain the pattern low.

Multiple trendline breakdowns and an overtly weak stochastics situation leads this strategist to the conclusion that AMZN’s weak behavior and downtrend from the July high aren’t finished. On continued weakness in Amazon stock price, taking initial profits on a challenge of $1,585 – $1,600 which is backed by AMZN’s next numerical milestone and the 62% support level looks appropriate.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1,815.22.

The projected upper bound is: 1,801.71.

The projected lower bound is: 1,655.19.

The projected closing price is: 1,728.45.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 66.8888. This is not an overbought or oversold reading. The last signal was a buy 4 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 40.29. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 42 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -46. This is not a topping or bottoming area. The last signal was a buy 1 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.

Rex Takasugi – TD Profile

AMAZON COM closed down -6.990 at 1,732.660. Volume was 36% below average (neutral) and Bollinger Bands were 8% narrower than normal.

Open     High      Low     Close     Volume___
1,731.6301,747.8301,723.7001,732.660 2,187,598
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1,735.68 1,795.32 1,781.63
Volatility: 23 26 33
Volume: 3,325,993 3,373,566 4,334,015

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

AMAZON COM is currently 2.7% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of AMZN.O (mildly bearish). Our trend forecasting oscillators are currently bearish on AMZN.O and have had this outlook for the last 6 periods.

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