Amazon AMZN Extends Uptrend Update

Wow!  Amazon.com (AMZN) has been one of the top performing stocks of 2015 as the stock continues to get stronger.

Let’s update our charts and note the new price levels on which to focus for short-term traders:

First, take a look at the prior update: “Targets and Opportunities for Surging Stock Amazon AMZN.”

In that post, I detailed the upswings (including gaps) and retracements for you.

The current upswing extended further after the strong, high-volume gap above $600.00 per share.

Note the multiple days to the upside as an impulsive breakout carried price above $660.00 per share.

Breakouts occur due to a “Feedback Loop” where buyers buy (for obvious reasons) but also sellers (short-sellers) buy to cover losing positions.

Amazon.com simply reminds us of our core principle that “Stocks which are strong tend to get stronger.”

Nevertheless, buying now would be highly risky given the over-extended swing in price.

We prefer to buy shares either on pullbacks (retracements) or on breakouts above key levels like the recent opportunity above $600.00.

The Weekly Chart reveals just how overextended shares are currently trading from weekly averages:

Price is roughly trading 20% above the rising 20 week Exponential Moving Average.

It’s just over $100.00 away from this key reference level.

Notice how price – especially in trends – tends to oscillate toward and away from this green average.

Again, selective caution is key here but Amazon continues to deliver strength to investors and swing traders.

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

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).