Amazon ( NASDAQ:AMZN ) has developed a bullish flagpole formation that is more easily seen on the hourly charts. This may serve as a continuation pattern that will launch AMZN to a 52 week high of $188 -- a level that hasn't been tested since July of 2021. Fibonacci retracement levels for the current trading pattern support the $188 ceiling as this value rests near the 168.1% level.
On-Balance Volume (OBV) has a positive slope which suggests that bullish investors are outpacing the bears. I also recently began using the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) indicators. While my experience with RSI and MACD is limited, the RSI appears to be approaching a bearish crossover before the MACD crosses above its signal line. I interpret this as a possible correction to the pennant support line (the 4th leg) with a near immediate recovery.
1D Chart
A share price in the 180s should be carefully watched as this level has been a significant area of resistance in the past. As tempted as I am to suggest it may be forming a double top, the middle trough dipped too low and it appears that AMZN may be trading in a horizontal channel. If AMZN surpasses the $188 price ceiling with significant volume then a 12 month price target of $250 is pragmatic. Should the opposite occur then a 12 month target of $80 could also be expected.
Trade active
⋅
Ascending channel in progress. On several time charts, MACD is about to cross its signal line from above which is a bearish signal. Possible low of $170.60 before future movements can be accurately projected.
Trade active
⋅
It is now a possibly good time for Puts as AMZN appears to be on course for a correction to the ascending channel support line, approximately $162.50.
1D chart reveals more significant, bearish signals: RSI has a negative slope and is beneath its MA line while MACD shows an approaching cross from above.
Potential Bull Flag? That said, I can certainly see it $162.50 being a good target based on the 4H
Shepherd_Investor
⋅
@Vinny10, I've interpreted it as having already broken out from the bull flag and since corrected, but if you're seeing something different let me know! I'm waiting to see what happens when the market opens Tuesday. RSI and MACD appear to support a correction to $162.50 but I'm pretty cautious about trading in the middle of a parallel channel.