Amazon (AMZN) Double Top or Straight Drop?

3 thg 1, 2019

If you read my DJI analysis, you'll know that I am bearish on the stock market right now, but particularly tech stocks. I've been bearish since AAPL was trading at $230 and as soon as it hit the $1 Trillion market cap. There's just not enough However, the market is still showing signs that buyers haven't given up, and the majority still seems to be bullish, at least in terms of retail traders. We might end up seeing a big double top playing out in some of these tech stocks. In AMZN, this means if we break out decisively above 1550, we may see a rise up towards 1800 before the full bubble pop. I expect the bottom of the bear market for AMZN to be anywhere between $500 and $600, but obviously this view will change, depending on market conditions. On the logarithmic chart, we have decent support near the $750 area (shown below), but on the linear chart we can see that this is forming a classic bubble structure. Remember, people buying AMZN during the 2008 crash made close to 60x profits at the recent top around 2000. Pretty insane. Even at current prices, the profits for these people are astronomical.

Log Chart with potential bearish targets (red X's)


If we break down beneath the orange steep rising trendline and below the 1300 price point, we will likely see a steep selloff, regardless of whether or not a second top happens.

Potential setups are as follows:
BUY 1550-1600
SELL 1800/high 1700

SHORT Break below the orange line or 1300.

More short-term: SHORT break below 1500, with a target between 1300 and 1350.

This is not financial advice, and I'm not a professional. This is a setup I'm looking at, and I'm curious to see if it plays out. Interesting times ahead indeed! Good luck!

-Victor Cobra

3 thg 1, 2019

Ghi chú

Forgot to continue my second sentence from the beginning (hate how you can't go back and edit on here): There's just not enough people who are excited about more innovation. Our lives have already been changed drastically, and we need to adapt to this change. This will take a while, and I think it'll result in slowed down technological growth.

5 thg 1, 2019

Ghi chú

If we can get above the 1600 area, the double top idea will likely play out. The same goes for Microsoft (MSFT).

7 thg 1, 2019

Ghi chú

Looks like we're reaching for that double top! Congrats to those who bought the lows, looking for a nice swing trade. We may not get as high as it shows in the drawing on my chart. I'd look for when sellers step in next to decide if we stagnate or move higher.

18 thg 1, 2019

Ghi chú

If we can get above the 1800 resistance, it would be a good sign, but I have a feeling we're going to drop back down soon. Earnings for tech are projected to be lower across the board. This goes along with my thinking that tech needs to cool off for now, as people are not as interested in buying as they were before, when everything was new. Obviously if the orange ascending support fails, we will head much lower.