Join        Login             Stock Quote

From A To Z: Amazon’S Stock Chart Is Worth Watching Today

 March 21, 2012 09:40 AM

Amazon.com, Inc.'s (AMZN) purchase of material handling technology firm Kiva Systems put some Red Bull into AMZNs stock. The price grew wings on the news and swung nearly $7 to the good side.

Analysts believe the acquisition will help the monster online retailer put fatter profits on the bottom line. Before management broke out the big wallet, Wall Street expected Amazon to earn 7 cents for the current quarter. iStock's earnings' model says brokers are sandbagging. We forecast at least 11 cents.

Once the ink dries and the deed is done, the "official" consensus number is likely to be revised up. We will be reviewing our iEstimate as well – stay tuned.

[Related -Level Watching and Swing Trade Planning for Amazon (AMZN)]

In the meantime, the street's algorithms aggressively banged the buy button yesterday. Shares turned 57% more volume than normal and pulled the 12-day average to the top-side of the 50-day mark. Another green day and the 26-day will put the 50-day benchmark in the rearview mirror too.

Many chart watchers wait for bullish crossovers to pounce. Toss in the MACD line moving into positive territory and AMZN's stock chart is sure to catch many a trader's eye.

Moving beyond the obvious, iStock spies a breakout from a pattern that usually means a powerful move is coming. In a classic, textbook fashion, Amazon's price thrust through the top side of a triangle (see below).

Triangles are important reversal patterns. Since mid-October 2011, Amazon's price has been under downward pressure. The stock fell from a 52-week high of $246.71 to a New Year's Eve low of $173.10.  For all of 21012, AMZN's top and bottom trend-lines have been converging a.k.a. a triangle.

[Related -Netflix, Inc. (NASDAQ:NFLX): Can Netflix Trump Amazon.com, Inc. With New Plans?]

Typically, the most dynamic breakouts occur on the 3rd of 4th attempt at a getaway. On cue, Amazon's jailbreak happened on try number four. Traders have to keep in mind that maybe a third of the time, shares will fall back to the escape point, $185ish.. 

Occasionally the stock will regain its bad triangle habits, but most of the time the return trip is just an attempt at EZ-money by shaking out weak hands. If our technical analysis is correct, iStock puts our initial near-term trading target at $210, with a secondary target of $220.  On the downside, a close below $179 is as low as we would be willing to go.

Amazon Technical Analysis Chart

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageGermany Is On The Rebound - Time To Buy?

Based on this year's 17% spike in the Stoxx Europe 600 Index, it seems investors have found a home in read on...

article imageIs Drought Risk In The American West An Economic Threat?

The historic and ongoing drought in California is getting harder to ignore in terms of its potential impact read on...

article imageFunds Behaving Badly

Discipline is still the key to read on...

article imageGenuine Parts Co. (GPC): This Company's Raised Dividends For 59 Years

There are 253 million cars and trucks driving along U.S. roads. And the average age of those automobiles is read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.