AMZN inside the range.... again.
Today we will take a look at AMZN.
Since September 2020, the price has been moving inside a 20% range approx. That means a little bit more than 500 days there.
Why is this interesting for me? Because from long periods of consolidations is where we tend to observe the beginning of new trends. I'm not saying that trend is starting right now but let's take a look at this:
Here we can see AMZN on the logarithmic chart so we can have a good perspective of all the movements in terms of percentage movement. I have defined ALL the corrections going from 280 days to 500 plus. And as you can see, this situation has already happened in the past, so my main hypothesis would be: "This is AMZN, not PTON, they have a solid moat, and I expect this company to make new bullish movements in the future. Someone could argue that MSFT, a solid company in 2001, spent almost 16 years on a drawdown, and that would be extremely valid. However, that's why I'm looking for a setup here and not to invest.
So what's the setup I'm thinking about? I think it is highly possible that the price reaches the major support of the correction one more time. From there, I would like to see the price action to confirm a possible reversal movement or a bearish breakout. However, if I observe reversal signals and then my filters are fulfilled, I think it may be an interesting level to develop setups and try to be part of the next bullish movement from an early stage that provides a great risk to reward ratio (higher than 5)
At the moment, I will keep waiting for the price to reach that level before thinking of any new setups here. Thanks for reading! Feel free to share your view in the comments.
Since September 2020, the price has been moving inside a 20% range approx. That means a little bit more than 500 days there.
Why is this interesting for me? Because from long periods of consolidations is where we tend to observe the beginning of new trends. I'm not saying that trend is starting right now but let's take a look at this:
Here we can see AMZN on the logarithmic chart so we can have a good perspective of all the movements in terms of percentage movement. I have defined ALL the corrections going from 280 days to 500 plus. And as you can see, this situation has already happened in the past, so my main hypothesis would be: "This is AMZN, not PTON, they have a solid moat, and I expect this company to make new bullish movements in the future. Someone could argue that MSFT, a solid company in 2001, spent almost 16 years on a drawdown, and that would be extremely valid. However, that's why I'm looking for a setup here and not to invest.
So what's the setup I'm thinking about? I think it is highly possible that the price reaches the major support of the correction one more time. From there, I would like to see the price action to confirm a possible reversal movement or a bearish breakout. However, if I observe reversal signals and then my filters are fulfilled, I think it may be an interesting level to develop setups and try to be part of the next bullish movement from an early stage that provides a great risk to reward ratio (higher than 5)
At the moment, I will keep waiting for the price to reach that level before thinking of any new setups here. Thanks for reading! Feel free to share your view in the comments.
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