AMZN in Key Convergence Zone

AMZN is in a very interesting technical position here. Let's notice that AMZN is trading between its down-sloping 5 DMA, now at 1568.61 and its up-sloping 20 DMA, now at 1549.00, as the two MAs converge into a "thrust set up." Usually, when the two MA's converge, and price is situated between them, it is a warning signal about a forthcoming spike out of the convergence zone, either up or down.

My sense from the larger picture set up is that the spike will be to the downside into a test of the prior pullback low at 1525.35 from 3/19/18, which must contain the weakness to prevent more serious technical damage to the post-Feb. uptrend. Should such a scenario unfold, AMZN will find itself vulnerable to a press towards a challenge of is major support line from Nov. 2017, which cuts across the price axis in the vicinity of 1419/20.

As long as any weakness if contained above the 3/19 low at 1525.35, AMZN's set up will remain relatively positive, and as such, we cannot rule out another pop to new high territory projected to 1670/90 next.

3 22 18 AMZN Day GIF
3 22 18 AMZN Day GIF
  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!