A few weeks ago, Amazon stock was our Chart of the Day as we were looking at renewed strength in mega-cap tech stocks.
At the time, I was looking for a monthly-up rotation over the March high at $3,184. We got that and more, with Amazon ultimately running to $3,430. That was the post-earnings high and failed breakout attempt from earlier this year.
Now though, shares are at an interesting juncture. While the S&P 500 is looking a bit fatigued — something Danny Riley spoke about in the Opening Print — Amazon stock could still have some momentum left in the tank after it cools off a bit.
Danny Riley is Mr. Top Step’s 39-year veteran of the CME trading floor and ran one of the largest S&P desks on the floor. Here’s what he’s thinking each morning before the stock market opens.
Trading Amazon Stock
Bulls used the monthly-up rotation in Amazon stock to help fuel it over range resistance near $3,340.
However, $3,430 continues to act as resistance. I would like to see a slightly deeper pullback in the stock price now. Specifically, I’d like a dip down to $3,360-ish, which is prior range resistance and the 10-day moving average. To see prior range resistance turn into support would be a welcomed bullish development.
This one-two punch gives us a combo of support to buy into. If it fails, we’ll know pretty quickly and we can limit our losses. If it holds, we should see a quick bounce.
Ultimately, I want to see Amazon stock retest the $3,430 level. Above that opens the door to $3,500, then the all-time high at $3,552.
Perhaps earnings will ruin the fun — or perhaps it will kickstarts the next leg of the rally.
As we all know, there’s no crystal ball when it comes to trading stocks, options or futures. But the Market Imbalance Meter may be as close as it comes. Knowing how the “Big Money” is placing its bets can give our trading room a big wave to ride — or a warning sign to stay out of the water. Come check it out now, risk free for 30 days.
