Technical Analysis – Amazon’s stock opens higher but still fragile
February 2, 2023 4:26 pm
Amazon’s stock opened with a positive gap on Thursday but it instantly came under pressure at 111.00 and slightly below its 200-day simple moving average (SMA).
The giant e-commerce company is expected to report bleak yearly earnings comparisons after the close of trading today and some caution is required as the overbought signals coming from the RSI and the stochastics are currently suggesting that the 30% recovery from January’s low of 80.97 might take a breather in the coming sessions.
If the bulls breach the 111.85 resistance region, the recovery may ramp up to the 119.00-122.00 constraining zone formed by a descending trendline and the 38.2% Fibonacci retracement of the 187.97-80.97 downtrend. Another decisive close higher will be needed at this point to question the broad negative trend and lift the price up to the 50% Fibonacci of 134.60.
In the bearish scenario, the stock could drift lower to test the 23.6% Fibonacci level of 106.42. If that base cracks, the decline may stretch towards the 100.00 psychological mark, while the 20- and 50-day SMAs at 95.80 and 91.00 respectively may attempt to prevent a deprecation towards the 2020 floor of 80.97.
Summing up, Amazon’s stock seems to have a limited room for improvement given thestrengthening overbought signals. The latest upleg will remain fragile unless the bulls push sustainably above 127.00.
Amazon’s stock opened with a positive gap on Thursday but it instantly came under pressure at 111.00 and slightly below its 200-day simple moving average (SMA).
The giant e-commerce company is expected to report bleak yearly earnings comparisons after the close of trading today and some caution is required as the overbought signals coming from the RSI and the stochastics are currently suggesting that the 30% recovery from January’s low of 80.97 might take a breather in the coming sessions.
If the bulls breach the 111.85 resistance region, the recovery may ramp up to the 119.00-122.00 constraining zone formed by a descending trendline and the 38.2% Fibonacci retracement of the 187.97-80.97 downtrend. Another decisive close higher will be needed at this point to question the broad negative trend and lift the price up to the 50% Fibonacci of 134.60.
In the bearish scenario, the stock could drift lower to test the 23.6% Fibonacci level of 106.42. If that base cracks, the decline may stretch towards the 100.00 psychological mark, while the 20- and 50-day SMAs at 95.80 and 91.00 respectively may attempt to prevent a deprecation towards the 2020 floor of 80.97.
Summing up, Amazon’s stock seems to have a limited room for improvement given the strengthening overbought signals. The latest upleg will remain fragile unless the bulls push sustainably above 127.00.
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