Amazon (AMZN) was reviewed last Thursday where I recommended that "The major averages have opened higher on Thursday, and AMZN is up around 2% in early trading. To me this is not enough technical evidence to recommend a long position."
As the day wore on the early gains evaporated and the bears remained in control. Prices have since broken the 200-day moving average line on Friday and have made new lows for the move down today. Let's see how this looks on the charts.
In this daily bar chart of AMZN, below, we can see some new (bearish) clues. The volume of trading has soared recently, telling me that longs are feeling the pain and selling.
The slope of the 50-day moving average is still negative and we can see that today could well be the second consecutive close below the rising 200-day moving average line.
The daily On-Balance-Volume (OBV) line is pointed down and tells us that sellers of AMZN are more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is bearish and a long way below the zero line.
In this weekly bar chart of AMZN, below, we can see a close below the rising 40-week moving average line.
The weekly OBV line has turned down and so has the MACD oscillator.
In this Point and Figure chart of AMZN, below, we can see a price target around $1,450.
Bottom line strategy: The lower AMZN goes on the chart the weaker it looks. AMZN could bounce but I fear it will only happen from a lower price area.