Quick Charting the Amazon AMZN Support Bounce

Feb 26, 2014: 11:45 AM CST

Amazon.com (AMZN) shares found support into a key target level and now we’re charting a rally up after the recent sharp sell-off event.

Let’s zoom-in on the support level, update the daily chart, and plan the short-term levels to watch for now:

Amazon AMZN Daily Chart Support Fibonacci

The key inflection support level for Amazon (AMZN) shares is the $345 level.  It’s the 50% Fibonacci (half-way retracement) and a historical reversal point from November and earlier in February.

The last few sessions saw an upward impulse away from this level toward the underside of the 20 and 50 day EMAs.

We can see recent updates “Updating Amazon into Fibonacci Support” and “Swing Trade Planning for Amazon.”

While we focus on the $345 level and how far the bounce higher can travel, let’s step inside recent price action to draw a Fibonacci upward target grid from the intraday chart:

Amazon AMZN Hourly Intraday Chart Fibonacci

Price traded into the 38.2% short-term target near $365 (achieved today as well as February 7th) and we’ll play the “Will it or Won’t it” strategy with respect to this level.

A clean breakthrough beyond $365 suggests price could travel higher for a quick “pop” trade into $373 which forms a confluence with the falling 50 day EMA near $370.

The “reversal down” short-term thesis would call for bearish plays (trades) that would trigger on another movement down away from the current resistance level.

This is just a quick update on short-term levels and not meant to be stand-alone analysis for Amazon – be sure to chart your own indicators and strategies and adapt any trades to your own risk tolerance with respect to these near-term levels.

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Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning parameters as we watch a “hold and bounce” or “break and retrace” scenario play out in the near future.

Corey Rosenbloom, CMT
Afraid to Trade.com

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