It hasn’t been the happiest of holiday seasons for Amazon (NASDAQ:AMZN) investors. But will it be a December to remember? Let’s take a look at what’s happening off and on the AMZN stock price chart to reach a more informed, risk-adjusted determination.
For a second straight day yesterday, investors were busy unraveling gift-like gains from November. From Apple (NASDAQ:AAPL) to Visa (NYSE:V) and even AT&T (NYSE:T) no company was immune to Wall Street’s sudden “risk-off” playbook.
Behind the market’s selling pressure, “Tariff Man” was back in action. This week has ushered in back-to-back tariff threats at China and EU. The latest bullying has France squarely in POTUS’ crosshairs with intimidation’s of substantial taxes on French goods as retaliation over the country’s plans for a digital tax.
It’s big news, to be certain, and is trumping AMZN stock’s own success in 2019’s holiday selling season. The latest sales tally has a just-finished Cyber Monday becoming Amazon’s biggest shopping day ever. Amazon is secretive with exact figures, but it is known consumers have bought “hundreds of millions” of products since Black Friday and culminating in Monday’s record sales.
Yet despite the success, shares of AMZN are off roughly 2% in the last five days. More important for investors, despite both the good and bad items on display in today’s financial news, it’s still about an undetermined trade war being waged on the Amazon stock price chart.
AMZN Stock Weekly Chart
Two days of selling pressure felt like a ton of coal had been loaded onto Santa’s sleigh. And understandably so. But will we get a repeat of last year’s December nastiness or is there hope yet? Our interpretation is AMZN stock’s weekly view continues to suggest it could go either way for bulls and bears.
In defense of higher prices, shares of Amazon have formed a bullish higher-low, double-bottom pattern which completed in September. What’s more, the formation developed on a successful challenge of the 50% retracement level. And with stochastics currently painting a favorable outcome, the odds of success are increased.
On the other hand, bears aren’t without just cause for seeing a lower Amazon stock. AMZN’s failure to rally to fresh highs in July resulted in a lower-high topping pattern. It could be a first warning of a larger correction. As well, in conjunction with several weeks of bearish flag-like price action set against resistance, the argument for shorting Amazon is also very real.
Source: Charts by TradingView
Amazon Trade Idea
Unsurprisingly, my advice is that bulls and bears should sit tight and put Amazon on their wish list for buying or shorting. Bottom line, wait for price confirmation of a pattern breakout or breakdown before capital is put at risk. Whether AMZN triggers a long above pattern resistance or a short beneath support isn’t known. But whichever outcome happens, I’m confident it will be a profitable gift.
Investment accounts under Christopher Tyler’s management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.