Updating Amazon as it Breaks Higher and Higher

Feb 13, 2015: 12:03 PM CST

Amazon (AMZN) continued its upward pathway following the recent trend reversal and breakway gap.

Let’s update our charts and plot current target levels as we study this great breakout-and-trend example.

For a bit of background, be sure to read the previous post “Amazon’s Bullish Surge from Divergences at Support.

In that post, I detailed the steps that preceded the breakout and gave upside targets – a couple of which price has already achieved without delay.

Gaps can serve as momentum impulses and result in additional movement IN the direction of the gap. 

It’s a concept that can confuse many new traders who feel that price must start to fill a gap… or that price can’t keep going up after a big upside gap.

Amazon – and actually many other stocks – show that price certainly can.

Here’s the broader perspective with new target levels in play:

The Daily Chart highlights the positive momentum divergences into the critical support line under $300.

Buyers broke price through the falling ‘triangle’ trendline and quickly achieved the targets of the prior highs.

At this point, price interacted with – and now is breaking through – the $380 prior high level.

Further upside action suggests that shares could continue trading higher toward $400 as the breakaway impulse continues.

Remember, one of the driving forces of an upward price burst like this is the short-sellers or bears who are buying-back losing positions.

The joining of bears buying (to cover) and bulls buying (expecting profits) can lead to explosive moves like this.

Continue watching price into the prior swing high targets as the impulse extends.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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3 Comments

3 Responses to “Updating Amazon as it Breaks Higher and Higher”

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  2. Six Power Trending Stocks to Start the Week | Afraid to Trade.com Blog Says:

    […] my recent post on Amazon (AMZN) for another example of a “Gap, Buy, Trend” […]

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