Amazon.com (AMZN) is a closely watched company. There are at least 45 analysts according to FactSet (FDS) that watch their numbers like a hungry hawk. What could a look at the charts add to things? Let's check anyway.
In this daily Japanese candlestick chart of AMZN, below, we cannot see a good reversal pattern and confirmation yet. Candlesticks provide the quickest reversals compared to many bar chart reversals.
The trend is still pointed down and the On-Balance-Volume and Moving Average Convergence Divergence (MACD) oscillator is still bearish and has not begun to narrow. We have more certainty of when a package will arrive than when a bottom will be in place.
In this weekly Japanese candlestick chart of AMZN, below, we can see two weekly shooting stars in February. In hindsight we can see that marked the top. Prices are below the 40-week moving average line.
The weekly OBV line has not shown much of a decline so it looks like prices have fallen mostly of their own weight. The MACD oscillator has just crossed to the downside for a take profits sell signal.
In this Point and Figure chart of AMZN, below, we can see some potential chart support in the $1745-$1690 area, but we can also see that the software is projecting a potential downside price target in the $1520 area.
Bottom line strategy: A lot of analysts and investors would love for AMZN to resume its uptrend but the charts and indicators do not indicate that just yet. There is the risk of a deeper decline so keep your powder dry for perhaps another week or two.
(Amazon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN? Learn more now.)
