Here’s my take on Amazon ($AMZN) (February 05, 2020)


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Here’s the thing with Amazon ( NASDAQ: AMZN ); this has been a really, really strong stock and I am going to show you why I think, actually, the best is yet to come just probably not right now.

If we look at this on Sigma Bands, just 3 standard deviations out, I mentioned last week that the stock is like “against the law” for this to be outside 3 standard deviations. But I also mentioned that just because that’s the case doesn’t mean that the stock is going to fall back in. Because as the price stays out here, because these are so reactive, these Bollinger Bands actually expanded, they rise.

And so you can have a stock like this for example where outside the upper Bollinger Band here, inside the upper Bollinger Band here. Yet this is actually a lower low. This is a lower low than this one relative to the upper Bollinger Band. You have a nominal or absolute high where the price is higher than the price. But when you are comparing it to the Bollinger Band, this is above the band, this is below the band so this is actually lower.

I would expect more weakness here but don’t give up on Amazon ( NASDAQ: AMZN ) and this is why: If you look at the weekly chart this thing has been trading in a range for quite a while. You can’t tell me that Amazon ( NASDAQ: AMZN ) is not in a stronger position here than it was last year in July when it tested this level. And it certainly is stronger here than it was back here in 2018.

And so I think it is just kind of a matter of time before Amazon ( NASDAQ: AMZN ) breaks higher and could really, really do well. But in the short-term, we all have to be a buyer sometime and we are all day traders when it comes to buying even a long-term investment, you want to get the best price. I would just watch Amazon ( NASDAQ: AMZN ) for a while.

I have serious doubts that the stock is going to run up to a new high that it set this morning before it starts pulling back a little bit. So I would give this stock some room but absolutely be watching it because we could have a monster of a move once this stock decisively breaks out, we’ll call it like 2100.00, it can go gangbusters.

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