$AMZN breakout? – September 13, 2023
Dan Fitzpatrick at StockMarketMentor.com. Let’s look at Amazon ( NASDAQ: AMZN ) today.
This stock had been trading sideways for a while, right along the 50-day moving average, which is what we like to see, a stock that is resting. I hate seeing a stock, trade along the 50-day moving average when I want it to go higher, I like it to be up just like it was here.
But there is an ebb and flow to stocks and it is healthy, in the long-term, in the long run, it is healthy to see a stock take breaks along the way. It’s like when you are driving a long distance it’s nice to get out and stretch the legs every once in a while; so Amazon ( NASDAQ: AMZN ) needs that.
That is exactly what it has been getting. If you look at the way this stock is trading here, it really did pinch. This is a pretty nice, what I call, a pinch and pop, or a touch and go, for that matter. Where the stock just kind of is a nice uptrending stock, it glided down to test the 50-day moving average.
It bounced along a little bit, and then back here on the 7th, on a little bit heavier than average volume. You look and see what happened. The stock actually gapped down at the open and then traded up all day long. It had a nice closing location value, very near the high. The following day, it actually gapped down just a bit. Not a lot, but it is important to look at this.
Because the stock closes at the high of the day, and then the next day it gaps down. Okay now, what’s next? Because if the stock gaps down and then continues to fall, then you have to look at the prior day and say, Well, maybe the buying interest wasn’t really there after all. And then you have to be suspicious of it.
But on the other hand, after a big move like this, that day, then the next day the stock gaps down a bit and then starts running up right away, your conclusion is, Oh, so professionals are down there waiting to buy this stock. The stock pulled back and they said, “Thank you very much, may I have another?” And then the stock starts running up again.
Alright, now we are at the end of the day on Friday. The following Monday, nobody’s farting around then, they are buying the stock up from where it closed on Friday, and then this runs up here. So what do we have? Oh crap, this is not a good thing, right? It gapped down and then traded near the low of the day. OMG, I’ve got to sell the stock.
Well, maybe not so fast. The stock gaps down even more today. Not a lot but it is worth mentioning. So it just gaps down a little bit and then runs higher again, on volume. So we’ve got a high volume move up, a high volume move, high volume, high volume. Where’s the high volume on the red candles? You have got to go back to here.
So this is a stock that is under accumulation. I have a bunch of call options on it over at Option Market Mentor. We are in it at Stock Market Mentor as well. This is a stock that I think you should be in. It is just looking to me like 150.00, which is only $5.00. Who cares? Well, I care because I am long a bunch of call options.
It looks to me like 150.00 is definitely in sight on a very short-term move. After that, I am not going to project further than that, I’ve got to wait and see what happens. My crystal ball is always cloudy. I have binoculars but they are kind of out of focus as well. So you just kind of take it one day, one trend, one move at a time.