Interactive Investor

Amazon stock: Buy or sell?

8th January 2019 10:20

Alistair Strang from Trends and Targets

This FAANG stock took a hit in the fourth quarter of 2018 but regained its footing at the end of the year. Chartist Alistair Strang tells us what's in store for Jeff Bezos & Co.

Amazon.com (NASDAQ:AMZN) 

With the US earnings season rapidly approaching, it can be worth a glance at some of the usual culprits. As always, some will surge, then recoil. Others will be dropped to find logical bottom levels for the next cycle of moves. 

Obviously, from a CFD or spreadbet perspective, this is liable to introduce opportunities.

In the case of Amazon, trading at $1,601 at time of writing, the share price appears to be playing a game of chicken with the blue downtrend on the chart. The immediate situation is fairly interesting as it requires to better just  $1,637 to enter a region where growth to an initial  $1,861 makes sense. 

If exceeded, secondary calculates at  $2,203. Importantly though, when we factor in a tranche of opening price gaps, this secondary could top out at  $2,097. Regardless, each "secondary" represents a new all-time high for the share and bodes well for the longer-term.

If we were to look for trouble, early warning will be weakness below  $1,303 - red on the chart. Such a movement permits reversal to an initial  $979. If broken, secondary is at  $853 and represents a point where a bounce will make a lot of sense.

For now, price movements are giving little away with rather a lot of respect paid to the immediate downtrend, along with the uptrend since 2016. We have a sneaking suspicion a drop is probable, thanks to the reversal experienced at the end of 2018.

Source: Trends and Targets. Past performance is not a reliable indicator of future results

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