Zooming in on Bullish Trades in Bullish Amazon AMZN

May 25, 2016: 12:42 PM CST

How do we trade a bullish stock that’s breaking out?

The easiest strategy is to buy pullbacks as price swings its way higher.

Let’s see an example of how to do this quickly via the recent breakout in Amazon (AMZN):

For a bit of background, take a moment to read my prior update:  “AMZN Bullish Breakout and Dominance Continue.

From that post, Amazon (AMZN) shares have continued their “bullish dominance” from the $660.00 breakout to the current high above $720.00 – with a current bullish swing possibly taking us even higher.

How do you jump into a surging bullish stock that’s breaking out?

Drop to a lower timeframe and trade the pullbacks or bullish opportunities as they present themselves.

I’m showing two specific Retracement Opportunities – “Bull Flags” or “Bullish Triangles” – that developed through May on the journey higher.

It’s very aggressive to trade immediately into a gapping stock, but safer to buy the pullbacks along the way.

The first opportunity triggered around May 9th when price retested the opening gap low (and rising 50 EMA on the Hourly Chart above).

We’d place a stop under $655 or $650 and play for a minimum target of the prior high into $690 – and preferably beyond.

Price surged higher, stalling initially into the “retest only” target of $690 then gapped up the next session to continue the bullish surge.

Once again, a second opportunity presented itself on a retest of the $685/$690 level last week.

Aggressive traders can enter on the TOUCH of a support level; conservative traders can wait just a bit longer for price to “prove itself” by breaking above a falling trendline as drawn (entering on the break).

While the first trade was successful, the second trade is still in motion as price plays (swings) toward the prior high or beyond it.

Take a moment to study the initial breakout and these two – or other – intraday trading opportunities as lessons.

If you’d like to learn how we recognize trends and pinpoint “perfect” pullbacks like these, enjoy our “Trend Traders Perfect Pullback” Lesson Bundle for you.

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Corey Rosenbloom, CMT

Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

1 Comment

One Response to “Zooming in on Bullish Trades in Bullish Amazon AMZN”

  1. Radha Says:

    The trend is definitely strong towards bulls, so we got to try and have correct entry to make things work correctly, I always trade with strict money management and proper planning, it always work nicely for me which is especially to do with OctaFX broker’s support which is through their 50% bonus on deposit offer, it’s fantastic and really helps me with results, it also keeps me comfortable the risk is obviously reduced big time with been so comfortable and relaxed.