Amazon.com, Inc. (AMZN) Stock: The Sleeping Giant Will Wake Soon

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Shares of Amazon.com, Inc. (NASDAQ:AMZN), while still in a bullish trend from multiyear and multimonth/quarter perspectives, are trading in a choppy, sideways range. It’s a classic case of a stock that’s testing the patience of traders and active investors alike. I say AMZN stock needs to be closely watched, as a better directional move higher could take place at any moment.

Beat the Bell: Amazon.com, Inc. (AMZN) stockOne of the major struggles I see in the vast majority of traders and investors I deal with is their inability (and often, unwillingness) to stop themselves out of trades that are going against them. This ends up leading to much larger-than-anticipated losses. Arguably even worse is the mental damage this does to traders.

The most profitable traders I know both in the professional circles, as well as among private investors, are the ones quickest to admit they are wrong on any given trade, but at the same time also willing to get back into a trade if their setup becomes valid again. This can mean trying out a trade more than once before it ultimately becomes profitable.

If I were to point to one single differentiating factor between successful and not successful traders, this would be it.

When I last discussed AMZN stock on Feb. 17, I offered that a breakout was very near and that a break and hold above the $848 area could open up the next upside target around the $880 mark.

The very next trading day, Amazon stock proceeded to rally and close above $848, but then settled right back into a boring sideways shuffle that has plagued the stock ever since.

AMZN Stock Charts

On the multiyear weekly chart, not much has changed since my last update in February.

AMZN stock chart weekly view
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Still, it’s worth pointing out that the aforementioned sideways shuffle is taking place just marginally above the stock’s previous all-time highs from 2016.

AMZN’s 50-, 100- and 200-week simple moving averages (yellow, blue and red lines respectively) continue to trend higher nicely. That is to say, from this time frame, there’s little if any reason to fight the stock’s uptrend.

Successful traders and chart analysts also recognize that any given stock or index’s support and resistance points of reference change over time.

AMZN stock chart daily view
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While AMZN stock has largely done nothing in recent weeks, a new reference area of support has emerged that needs to be recognized. This reference area of support is the area from $839 to $845, which makes up the lower end of the most recent multi-week sideways shuffle and is also increasingly matching up with the 50-day moving average (yellow).

From here, less risk-averse traders can try AMZN stock from the long side against the $839 area in hopes of a break higher toward $880.

More risk-averse traders (yours truly including) will want to wait for  a better bullish reversal to take hold and also push the stock past $860 before legging into new long swing trades toward $880 or higher.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/03/amazon-com-inc-amzn-stock-sleeping-giant/.

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