A Fresh Look at Amazon

 | Nov 21, 2012 | 7:55 AM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

amzn

,

bidu

I think I'd prefer to focus on a stronger stock than Baidu (BIDU) today. Even though I did give you a heads-up on that one in CC, I think we should discuss Amazon (AMZN) first. If we look at a weekly chart of this stock you can see that so far we are holding on top of a key support decision with the recent low being made at the 218.18.

First if we can continue to hold above this recent low, the upside POTENTIAL (in a perfect world) comes in way above the market at the 276 handle. Even if we only see a corrective rally back to the recent highs, there is still a decent upside potential.

So far, we have seen some initial buy triggers against the recent low via a 30-minute chart. I have illustrated the initial trigger on the 30-minute chart below. There is a pretty important hurdle on the daily chart however that AMZN needs to clear if this rally is going to continue in earnest. Let's take a look at that decision on the daily chart next.

 

 

 

 

I use 100% projections of prior swing in all the markets I analyze every day. These are also known as symmetry projections as I like to call them, or measured moves as other analysts might.

In the case of AMZN I'm watching a hurdle on the way up where the most important component of this hurdle is the 100% projection of the prior largest rally seen on this chart since the Sept. 14 high was made. This prior largest rally swing lasted $15.79. The current rally from the Nov. 15 low has been $15.64 as of the close Tuesday.

The hurdle I'm watching comes in at the 233.97 to 235.73 area. It includes the 100% projection of the prior rally swing of $15.79 along with a few Fibonacci price retracements of prior swings that overlap this projection.

I am already willing to trade the buy-side of AMZN with the buy triggers that have fired off so far, but a rally beyond this key upside hurdle will suggest that purchases will be a higher probability bet if we can surpass this zone. If we are unable to clear it, I would have to tighten up stops on any longs as there will be a chance for a failure at this same zone.

Let's see what AMZN does around this key decision and then trade accordingly! To fail or not to fail, that is the question I am waiting for the market to answer!

 

Columnist Conversations

Watching this pullback for a buy trigger against original weekly support decision. It needs to stay above 176...
The massive selling wave that hit shares of Oracle late last week continues to apply pressure. ORCL fell ...
Lang:
If you see the action today you might think everything is getting pasted for a second straight day (Dow down 7...
Market is slightly down at midday. NASDAQ and Russell 2000 outperforming S&P 500 and DJIA, the opposite s...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.