Trade and Price Pathway Planning for Amazon AMZN

Jun 19, 2014: 12:47 PM CST

With the recent announcement of Amazon’s new phone, shares initially surged but then retraced all the gains today.

Let’s step above the noise and chart a bullish breakout pathway but also balance this expectation with the broader downtrend and potential breakdown bearish price pathway.

We’ll plan trading strategies based on the current price levels and targets.

AMZN Amazon Weekly Chart Price Pathway and Trade Planning

Starting with the Weekly Chart, we can see the broader price pathway depending on what happens at the current level.

Shares retraced in an “ABC” retracement down from the $400 per share level and now challenge the underside of the 20 and 50 week EMA confluence near the $330.00 per share level.

The current two candles are bearish reversal candles – like shooting stars – with upper shadows scraping against $340.00 per share.

We also saw distribution volume – or strong sell volume – during the 2014 multi-month retracement.

The weekly chart suggests a potential downside pathway away from $340 toward the $300 or even $290 levels.

Before we expect downside action, let’s study bull and bear price pathways as seen on the Daily Chart:

Amazon AMZN Price and Trade Planning Daily Chart Targets

The “Neutral Zone” or focal point is the yellow highlight between the $320 and $335/$340 levels.

We would look to deploy bearish strategies (in alignment with the weekly chart) on a trigger-break under the $320 trendline and 20/50 day EMA support level – a breakdown here would simply target $300 per share then the $290 level.

Otherwise, a trend reversal and bullish breakout price pathway quickly opens above the $340 and $345 per share.

Any clean bullish upside break suggests shares will travel the bullish pathway through “Open Air” toward the prior high from March near $380 per share.

For now, focus on the yellow “neutral” range and be eager to deploy bullish breakout strategies above $345 or else bearish protective strategies under $320.

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Corey Rosenbloom, CMT
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