Another Amazon AMZN Breakout to New Highs

While scanning the 41 stocks in the S&P 500 that are making fresh new 52-week highs right now, I wanted to highlight one stock in particular today.

Our good friend Amazon (AMZN) broke free above another sideways rectangle pattern in an ongoing uptrend.

Let’s pinpoint the breakout – on “Amazon Prime Day” – and see the current opportunity:

A quick glance at the Daily Chart shows us three recent “Sideways Rectangle” Price Patterns in an ongoing bullish trend.

Share prices broke – on a gap – two times in 2015 with strength as buyers dominated sellers.

After both breakouts, shares traded sideways into a Rectangle Pattern consolidation.

Price tends to impulse and then stall into a sideways range… but price eventually breaks free of sideways ranges into a future impulse move.

That’s likely what we’re seeing here with another breakout to new chart highs in the stock, and it creates an aggressive pro-trend breakout buying opportunity.

New traders tend to do better buying pullbacks – retracements – to support (like rising moving averages).

The risk of trading a breakout is that price forms a “Trap” where price initially breaks out… but then returns back inside the Rectangle.

That’s why we need to take our stop-losses that trigger if price does break initially but then return into the range.

Odds favor a retest of the Rectangle Support Low in the event of a trap triggering.

Nevertheless, continue following and trading “strong stocks getting stronger” in this ongoing bull market.

Check out:  “Three Strong Stocks Powering to All-Time Highs”

“Scanning Four Dow Jones Stocks at New 52-Week Highs”

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Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).