Hello Everyone! The divergence spotted early June on 1H, 4H, D and W timeframes did not take place.
Amazon is showing a strong momentum bouncing on the 20 sma on its daily timeframe.
Aldough on shorter timeframes divergence is still in place, on W timeframe the RSI divergence disappeared after the recent rally, the indicator is in overbought level at a value of 80, than, how to act ?
An overbought condition does not mean that tomorrow the price will start to decline, it might remain overbought for a certain amount of time, let's enjoy the ride as expensive can get more expensive, on the other hand we do know that price cannot go up in a straight line without retracement, and when price is too far from its 20 sma it is a signal of a potential down move.
Whether this move will happen sooner or later we will see, in case of a strong down move it is possible the price will go under the 20 sma and reach the previous area of resistance between 2047 - 2182 which will likely become new support area.
Thanks for reading and...may the market be with us!
Amazon is showing a strong momentum bouncing on the 20 sma on its daily timeframe.
Aldough on shorter timeframes divergence is still in place, on W timeframe the RSI divergence disappeared after the recent rally, the indicator is in overbought level at a value of 80, than, how to act ?
An overbought condition does not mean that tomorrow the price will start to decline, it might remain overbought for a certain amount of time, let's enjoy the ride as expensive can get more expensive, on the other hand we do know that price cannot go up in a straight line without retracement, and when price is too far from its 20 sma it is a signal of a potential down move.
Whether this move will happen sooner or later we will see, in case of a strong down move it is possible the price will go under the 20 sma and reach the previous area of resistance between 2047 - 2182 which will likely become new support area.
Thanks for reading and...may the market be with us!
