Get Ready to Buy Amazon.com (AMZN) Stock

Amazon.com, Inc. (NASDAQ: AMZN) seems poised for a price surge based on its latest charts. The company engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS).

Bullish Indications

#1 Falling Wedge Pattern Breakout: As you can see from the daily chart, the stock had been forming a falling wedge pattern for the past few weeks. These are marked as purple lines. The stock has currently broken out of the falling wedge pattern and looks poised for an upmove. A falling wedge is a bullish pattern and a breakout from it implies that the stock may move higher in the short term.

AMZN – Daily Chart

#2 Bullish Stoch: The %K line is above the %D line of the stochastic and is also moving higher from oversold levels in the daily chart, indicating possible bullishness.

#3 Bullish RSI: The daily chart shows that the RSI is currently nearing 50 after moving higher from oversold levels. This is a possible bullish sign.

#4 Trendline Support: As you can see from the weekly chart, the stock has currently taken support at a trendline, which is marked as a pink dotted line. This looks like a good area to move higher. The stock is also trading above its 200-week SMA, indicating that the bulls are still in control.

AMZN – Weekly Chart

#5 Oversold CCI: The weekly chart shows that the CCI indicator is moving higher after reaching oversold levels. CCI is a momentum-based oscillator used to help determine when the stock is reaching an overbought or oversold condition. The upmove after reaching oversold levels is a possible bullish sign.

#6 %K above %D: The %K (blue) line of stochastic has currently crossed above the %D (Orange) line in the weekly chart as well, and is also moving higher from oversold levels. This is a possible bullish indication.

Recommended Trade (based on the charts)

Buy Levels: If you want to get in on this trade, you can purchase shares of AMZN above the price of around $212.80.

TP: Our target prices are $238.00 and $254.00 in the next 3-6 months.

SL: To limit risk, place a stop-loss at $199.00. Note that the stop-loss is on a closing basis.

Our target potential upside is 12% to 19% in the next 3 to 6 months.

For a risk of $13.80, our target rewards are $25.20 and $41.20. This is a nearly 1:2 and 1:3 risk-reward trade.

In other words, this trade offers nearly 2x to 3x more potential upside than downside.

Risks to Consider
The stock may reverse its overall trend if it breaks down from the breakout level of the falling wedge pattern with high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.

Happy Trading!

Tara