AMAZON AMZN
Rising wedge?
Could it be? The rising wedge is a rare pattern that implies exhaustion of all potential buyers and an imminent continuation of the previous downtrend, which was a violent decline on the quarterly revenue report (not an earnings report, because earnings have yet to matter for Amazon).
I am intrigued about this pattern setting up now as the price hike for Amazon Prime didn't create much of a stir for the stock and therefore I'd guess that long-term holders may just be taking some money off the table here, which is keeping pressure on the shares, compared to the market overall.
The bloated valuation of Amazon makes the stock a "source of cash" for the upcoming year as portfolio managers can easily find other stocks with more visible earnings streams to switch into.
I have no idea what specific catalyst will make AMZN come under pressure and in all likelihood this projection is extreme looking and just a technical aberration. If AMZN can climb up towards the massive distribution area at 385-395, then a much lower risk-reward trade will set up. From here the risk is $13 to make $38 (on a drop to $330) but the odds of this pattern happening are low, maybe less than 20% chance. However, I wanted you all to see this setup anyway.
Tim 1:49PM EST 3/20/2014 368.91 last
Rising wedge?
Could it be? The rising wedge is a rare pattern that implies exhaustion of all potential buyers and an imminent continuation of the previous downtrend, which was a violent decline on the quarterly revenue report (not an earnings report, because earnings have yet to matter for Amazon).
I am intrigued about this pattern setting up now as the price hike for Amazon Prime didn't create much of a stir for the stock and therefore I'd guess that long-term holders may just be taking some money off the table here, which is keeping pressure on the shares, compared to the market overall.
The bloated valuation of Amazon makes the stock a "source of cash" for the upcoming year as portfolio managers can easily find other stocks with more visible earnings streams to switch into.
I have no idea what specific catalyst will make AMZN come under pressure and in all likelihood this projection is extreme looking and just a technical aberration. If AMZN can climb up towards the massive distribution area at 385-395, then a much lower risk-reward trade will set up. From here the risk is $13 to make $38 (on a drop to $330) but the odds of this pattern happening are low, maybe less than 20% chance. However, I wanted you all to see this setup anyway.
Tim 1:49PM EST 3/20/2014 368.91 last
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