Amazon is Looking Miniature

• Posted by Greg Harmon
• on December 14th, 2011

You cannot have a discussion of the Holiday season without Amazon.com, $AMZN, coming up. They sell everything, they are on every box delivered and they continue to expand. Here in the middle of this hustle and bustle the stock staved off a scary fall Wednesday but what is in the future? Let’s take a look at the stock on multiple timeframes to get a sense of its future.

Daily

Down in the details, it had a very long tailed Hammer candle Wednesday after breaking through the key level of 176.25, finishing back over 180. If this is confirmed with a move higher on Thursday it may be safe for a trade higher to resistance at 190, where you can see a large price by volume bar, followed by 198 and 203 above that. there is also a makeshift trend resistance line being formed by the 20 day Simple Moving Average (SMA) also the mid line of the Bollinger bands. But it is far from being off of the heater. The Relative Strength Index (RSI) has been bearish for a couple of months and hugging the 30 level and the Moving Average Convergence Divergence (MACD) indicator has just crossed bearishly negative. Also note that the 50 day SMA has crossed bearishly down through the 100 day SMA today. other than the Hammer there is no good news here.

Weekly

Pulling back to the weekly chart shows that is has been falling since peaking above the target of 230 from the Measured Move out of the 2009-2010 consolidation. This weeks candle with two days to go is the first to materially reach down below the 180 support level and near the 100 week SMA. The RSI is making a lower low, the lowest since June 2010, and the MACD is growing more negative. A break under 180 finds support at 160 and then around 142 followed by 125 and 115. It will take a move back over 197 to change the downward bias to neutral and over 220 to positive.

Monthly

Finally on the monthly chart is where the doom comes in. After 3 months of topping signals in August, September and October with a Hanging Man, and two Doji, it began to fall in November. The RSI is now trending lower and the MACD has just crossed negative. A fall below the 170 level looks imminent and support below that comes at 139.25 and then 118.50.

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