AMZN: Chart of the Week

Let’s take a look at the chart of Amazon (AMZN).

You can see from the middle to early part of March the stock has been in a nice uptrend with higher highs and higher lows. You can see the channel is established here of higher highs and higher lows.

We are having a strong day here on April 19. It’s an outside day, but today is a really strong outside day to the upside after yesterday’s outside day to the downside.

What is an outside day? It means you have higher highs and lowers lows from the prior day. When you have a white candle or green candle like you have today, it’s a bullish engulfer. Yesterday was a bearish engulfer, but it was a smaller range.

We did test this 20 day moving average recently, which is this dotted line between the Bollinger bands, and successfully rallied back up above there. How do I know it’s successful? We had one close below this 20 day moving average, and we bounced right back again last Thursday with a higher high and higher low, and then the same on the following day of Friday.

We also see strong money flows in the Chaikin Money Flow, and pretty decent volume trends as well.

We have a gap that needs to get filled around 113 or so. Some people say, “The gap fills on this bottom part.” No, it doesn’t. It fills because we gapped down in February after earnings came out. It fills up at 113. There’s quite a bit of room left to go for this stock that keeps going higher.

The 200 day moving average is coming in at good resistance at about 107. We do have support from the shorter moving averages, like the 10 and 20, and even the 30 day moving average, and even the 50 and 100 day moving averages. It’s moving through the 50 day moving average today.

I think it’s got some upside, at the very least towards the 200 day moving average, which is about $2.50-3 before it runs into resistance. Relative strength is not too overbought here.

We are long some calls here and I think even in overtime, we have room to fill the gap up to 113.

And that’s Amazon!