Trade Planning and Targeting for Google and Amazon GOOGL AMZN

Jan 4, 2016: 3:27 PM CST

Big trending stocks Google (GOOGL) and (AMZN) took a big bearish hit (gap down) this morning and arrived at a critical support pivot level.

Let’s update our charts of these high-flying, bullishly trending (so far) charts and note an unbiased trade plan at these critical pivot prices.

First up is Google (GOOGL):

As we’ll see from the similar chart (and trade plan) in, Google (or Alphabet if you prefer – I don’t), the stock is uptrending into a key resistance level AND a key support level as highlighted.

A Bull Trap outcome (like the broader stock market) thrust price back to the lower support trendline and rising 50 day EMA (blue).

It’s from here we’ll plan the next swing and thus create a short-term trading plan.

A bullish movement “up away from” the $750 pivot suggests a return to the upper trendline near $780.

However, our first breakdown and sell-pathway triggers under the $750 and especially $740 level.

If we see a downside swing, look toward the $710 region as highlighted for a breakdown target.

Otherwise, Google (GOOGL) should be seen as “Edge of the Cliff” bullish until proven otherwise with a breakdown.

The situation is almost identical in (AMZN):

A similar uptrend took price to a similar sideways (highlighted) rectangle or trendline pattern.

A similar Bull Trap outcome collapsed price away from the failed breakout toward the new lower support.

However, Amazon is breaking under (at the moment) both the rising 50 day EMA and the lower support trendline near $640 per share.

This puts Amazon shares in danger of continuing a breakdown/breakout swing toward the $600 level again.

We like to create trades based on “departures” or movements “away from” key levels “toward” key targets.

For now, the departure under $640 – if continued under $630 – opens a sell pathway toward $600.

If we see price safely back above $640 and into the yellow highlighted trendline, we can trade a bullish pathway back toward $685.

Whatever other type of analysis you are using, incorporate these levels and updated targets into your plan.

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Corey Rosenbloom, CMT
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1 Comment

One Response to “Trade Planning and Targeting for Google and Amazon GOOGL AMZN”

  1. Deven Malhotra Says:

    Really a nice analysis !

    As i look at Bollingers, i take this Squeeze as a good continuation pattern. So for Google chart, i would be betting on Long side only & will avoid shorts.

    but one query – When you will consider this as a breakout failure towards Longs? Any candle close or some trendline break (not close).

    Thanks a Lot for such nice analyses..