Amazon AMZN Breakout and Bullish Dominance Continue in May

May 12, 2016: 10:55 AM CST

Amazon.com (AMZN) shares continue their strong bullish dominance and a new breakout opportunity continues to deliver profit to active bullish traders.

Let’s note the larger trend and focus on the current breakout to new highs in an ongoing powerful uptrend:

“Stocks which are strong tend to get stronger” and Amazon (AMZN) continues to strengthen powerfully.

We see a strong, persistent uptrend (except for 2014) on the Weekly Chart.

2015 was a particularly bullish year for shares as price doubled from the $300.00 level to $600.00 and beyond.

An early pullback to $500.00 in 2016 set the stage for the power-rally that propelled price from $500.00 to $700.00 where we have our current breakout.

The larger trend is up and that creates additional opportunities on the lower timeframe:

Recently, the $550.00 per share level – along with $500.00 – has been the key short-term pivot price.

Price broke impulsively higher – a breakout opportunity – in October and surged toward the $700.00 pivot.

A negative divergence sent price back toward – and under – this level as we began 2016.

However, buyers rallied the stock toward the prior high and now above it, generating what has been a strong breakout so far.

Volume and momentum spiked on the recent breakout and we can draw a parallel to the October 2015 breakout.

First, we don’t short-sell impulsive breakouts, no matter how tempting it may be.

Second, we can either swing-trade aggressively long or we can trade on the intraday (lower) timeframes when buy signals occur.

Whatever vehicle you use – options or stocks – focus on the departure from $700.00 into “open air” and continue to put the current bullish in the context of the last few bullish years.

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Corey Rosenbloom, CMT

Afraid to Trade.com

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2 Comments

2 Responses to “Amazon AMZN Breakout and Bullish Dominance Continue in May”

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