Updating Targets for Amazon AMZN Surging Stock

Oct 26, 2015: 12:53 PM CST

Just how high can Amazon.com (AMZN) stock go?

Let’s update our targets, highlight the trend, and tackle this raging bull stock.

The weekly chart shows a persistent uptrend beginning in January 2015 that has doubled the price from $300.00 per share to the current $600.00 level.

The uptrend has been remarkably stable and has been confined between rising parallel trendlines.

Volume and momentum have both increased during the rallies in price, with the exception being a slight negative divergence in both volume and momentum currently undercutting the $600.00 per share high (a slight caution sign).

After price extended above the upper weekly Bollinger Band, price then retraced (sideways or straight down) toward the rising 20 week Exponential Moving Average (green).

We’ll be on guard for another retracement as price is overextended and divergent into new all-time highs.

Here’s the Daily Chart structure:

The Daily Chart reveals the persistent uptrend and power of the rising lower (blue) trendline.

Price has rallied up off this level persistently through 2015.

I’m noting three spikes (gaps) higher on earnings that propelled this stock higher, and each time price rallied up ahead of the earnings announcements.

However, shares saw immediate retracements through May (sideways) and August (down) after the last two events.

Should share prices immediately fall under $600.00 per share, be careful as price could once again retrace lower toward the rising blue trendline or rising 20 week EMA (both near the $525 level currently).

It’d be too late from a risk/reward standpoint to buy shares at current levels given the historical retracements.

Of course, that’s not saying price can’t extend higher and defy the odds or gravity – it’d just be a lower probability outcome for a persistent uptrend to continue after a $100.00 rally.

In fact, we can chart the prior rallies AND retracements from 2015 as seen below:

A quick estimation of the rallies (green) and retracements (red) highlights the structure of the current uptrend.

Here are the details of the rallies and retracements from 2015:

1.  $102.14 rally (35.65%) that saw a flat/sideways retracement for 70 days

2.  $77.80 rally (21.16%) ahead of an almost identical 70 sideways retracement

3.  A powerful $113.07 rally (26.69%) low to high) undercut by a strong $72.87 retracement (13.62%)

4.  An instant $85.60 rally undercut by a $56.96 retracement (10.35%)

Finally our current powerful rally is similar to rally #3 as price has advanced $112.96 (22.88%)

Logic would suggest caution at these lofty prices as we can expect either another sideways rally or sharp retracement.

As always, continue to do your own research and planning for your positions into this high volatility candidate.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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1 Comment

One Response to “Updating Targets for Amazon AMZN Surging Stock”

  1. Salman Says:

    It’s great to have updates of these trends, as that way we can get good profits. We need to be making sure that we use good money management, as the risk is forever present even with following the trend, as it can change anytime. I trade with OctaFX broker and they got terrific service including low spreads, high leverage, stop out level of just 15% and much more, so all this adds up to great benefits for me in this risky market.