Amazon faked out?
Vasl Capital
AMZN·
Aug 26 2021
2
Amazon, one of the trillion-dollar companies, has been on a bearish run since a few weeks.
Technically, DAILY time frame will be analyzed for going long. We won’t be looking for shorts on Amazon given the long-term outlook on the fundamental company aspect.
Daily
- Market structure: Amazon has had a strong bull run with creating new higher highs and higher lows. It broke the $3500 resistance level with force. What happened lately on the stock is that it gapped downwards towards the $3290 area. This gap landed perfectly on the daily support. Usually, gaps which are not aligned with the trend are tend to fill. In this case, the gap fill will be on a bullish side. Now that this support is breached as well, it looks like a fakeout because price action isnt reflecting a retest.
- Trendline: An ascending trendline, which was breached earlier, has validated the breakout sells. Now that the structure seems to be being breached, we will wait for the market to leave the zone on the upper side. Only then we will be able to confirm the breakout sell being invalidated.
- Retracement: The golden retracement area of 75-78.6% was below the support region at the price of 3180. The market touched this retracement and resorted back to the support turn resistance area.
- EMA's: EMA 50 is bearish and EMA 200 is bullish. EMA 200 is being tested at the support level. Hence, another added factor for the long positions.
- RSI/CCI: Both RSI and CCI went to the extended over-sold region. RSI dropping to 29 level and CCI to 300. At this level, Amazon pounced back up due to the over-sold pressure being waved off. Right now, RSI is becoming bullish, being at 47, it needs to cross the 50 level. On the other hand, CCI is already bullish at 31. If RSI flips bullish above 50, along with candles opening above the support turn resistance turn support level, we have a good chance to take a long position.
Conclusion: Bullish
Earlier, we had already taken a buy position on AMAZON. Its now on the discretion of the trader to stack up another long position at this current trade idea.