Amazon.com ($AMZN) looks like a stock to watch for a potential breakout ahead. I’ve got three reasons why this stock could be ready for a very nice breakout opportunity.
First, I would like to thank my friends over at TTTHedge.com for allowing me to speak at their Summer Lecture Series. The event went Extremely Well, and I am happy I was able to be a part of it! Those guys run a great trading chat room and they know what they’re doing.
Follow the guys on Twitter, and visit their sites!
Tom – @tomandprisha, www.TTTHedge.com
Red – @redliontrader, www.RedLionTrader.com
Now, onto some business..
1. $AMZN has formed an Inside Value Relationship
The 15-minute chart of $AMZN shows an Inside Value relationship has formed using the Money Zone value area levels. This means that the value area for today’s session will be inside the value area from yesterday’s session.
This relationship usually precedes a nice breakout opportunity, so keep an eye on this stock for potential trending day.
If price opens beyond $124 or $121.40, we could see a nice trending move in the direction of the break.
2. $AMZN has formed an Inside Day candlestick setup
Another reason I believe $AMZN is ready to move is the Inside Day candlestick setup that has formed in the daily timeframe. This pattern occurs when the day’s price range (from High to Low) remains within the price range from the prior session.
When this pattern develops, a major breakout opportunity is usually around the corner.
If you recall, I wrote about this setup for the $DJI a couple of weeks ago (HERE), just before it got a HUGE breakout, which I wrote about in the blog entry entitled “Anatomy of a Winning Trade.”
Let’s see if we can get the same type of result.
3. $AMZN is sitting just below 200-day SMA
The daily chart also shows price has stalled precisely at the 200-day SMA. As you know, the 200-day SMA is the major barometer used by longer term traders to identify the health of a stock.
Usually, price doesn’t hang around the 200-day SMA long, as moves away from this line are usually swift and decisive.
The Inside Value and Inside Day relationships could lead to a big move away from this moving average soon, so watch for a breakout in either direction.
Let’s see what happens!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss