The Arc of Amazon AMZN and Planned Pullback Oct 10

Oct 10, 2016: 11:10 AM CST

Amazon (AMZN) shares are forming another Arc Pattern into the $845 per share level.

What does this mean and what’s the plan to trade the next immediate swing?  Let’s see.

Amazon (AMZN) shares are in a confirmed and persistent uptrend.

We like to identify “Strong Stocks Getting Stronger” and buy pullbacks in strong uptrending stocks.

Amazon shows us numerous examples of successful pullback (retracement) trades along the way.

But what’s going on right now?

We’re seeing another over-extended swing to the upper Bollinger Band as a price “arc” develops.

This suggests that the next immediate swing will be a pullback toward the rising 20 day EMA at $820.

Here’s the pattern developing on the Intraday Chart – with enhanced negative divergences:

The most recent pullback (in the context of the Daily Chart Uptrend) took shares toward the $760 level.

A positive divergence – at a buy zone – was the catalyst that sent shares soaring higher, continuing the uptrend.

However, price is overextended and negatively divergent in both volume and momentum into the $845 level.

If you’re super aggressive, you can short a potential pullback “down away from” the $845 pivot.

Otherwise, wait for price to pull back – avoid buying shares here – and consider another buy strategy at a more favorable lower level such as $820.

Either way, it should be fun to watch – and perhaps trade – the pullback or ‘unexpected’ breakout beyond $845!

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Corey Rosenbloom, CMT

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3 Responses to “The Arc of Amazon AMZN and Planned Pullback Oct 10”

  1. Intelligent Trend Follower Says:

    Thanks for this interesting take. I appreciate having a relatively quantitative way to measure how shares could perform on a pullback.

  2. Now That’s a Nice Pullback for Amazon AMZN | Afraid to Blog Says:

    […] See our prior trade planning update from October 10th on the Pullback Yet to Come in Amazon. […]

  3. Traves Says:

    Got to be very careful with these pullbacks since only then we will be able to work out well and will be able to make profits. I am lucky enough that I am trading with OctaFX broker and they are the biggest reason for my success and been able to work with ease and comfort, it’s possible through low spreads, high leverage, bonuses and many features like that, so that’s what helps me work smoothly and able to bring profits too.