For the first time ever, Amazon (AMZN) is having a second Prime Day-like mega sale in one year. Bargains are coming, but try not to get too excited about the rally in AMZN shares just yet.
Let's check out the charts and indicators and pay less attention to the free shipping.
In the daily bar chart of AMZN, below, we can see the past 12 months of price action. Prices bottomed in May and June and rallied into August but rolled over as September approached. Prices have retraced two-thirds of the prior rally and the indicators remain weak despite Tuesday's gap to the upside. The slope of the 50-day and the 200-day moving averages is negative.
The On-Balance-Volume (OBV) line has been weak since early August telling us that sellers of AMZN are more aggressive than buyers. Trading volume has been heavier on down days versus up days. The Moving Average Convergence Divergence (MACD) oscillator (a trend-following indicator) is bearish but could generate a cover shorts buy signal in the days ahead.