Amazon Stock Could Drop 20%
Data coding method: (AMZN) is rapidly entering a bearish seasonality that could trigger a painful first quarter decline from 15% to 20%. Mass sale can point and fill the Oct. 27 gap between $ 980 and.1,050, generating a key support Test at the nivel 1,000 level. A failure to maintain that psychological floor can generate even stronger sell signals, setting the stage for a higher or longer-term correction.
The calendar twist marks the start of the capital gains tax sales season, when market players turn over their biggest winners from the previous year to incur tax liability and free up capital to allocate to weaker performers through the January Effect. In addition, the retail sector comes out of the most positive seasonal period of the year as soon as the holiday results are spread and discounted, which often leads to sharp declines. (SEE ALSO: Trump takes aim at Amazon in the postal Service’s call to raise prices.)
The company went public at an adjusted división 1.97 split in May 1997 and entered a staggered rally that accelerated in 1998 at the height of the Internet bubble. Aggressive sellers emerged close to cerca 100 at the beginning of 1999, generating two Tests in the new millennium while producing a new high at $ 113 that further limited the upside for nearly a decade. The bottom fell when the bubble burst, causing a decline that reached the single digits before ending in the fourth quarter of 2001.
A rebound in the fourth quarter of 2003 stalled in the bear market’s 50% pullback just above $ 60, producing a slow-motion decline that persisted through most of the mid-decade bull market. The stock finally rose in 2006, stagnating within 12 points of the maximum bubble in October 2007, when the broad market ended. It performed relatively well during the economic collapse of 2008, recording a higher low that set the stage for a stronger performance during this decade.
A break in 2010 marked the starting point of an upward channel of record scale that is still in effect eight years later. The stock has not tested channel support, now at enero 650, since January 2015, while it has been invested in channel resistance five times in the past three years. The most recent fault developed in December 2017, when it broke the channel and turned the tail, triggering preliminary sell signals. Meanwhile, broad action since 2008 has carved out a long-term Elliott five-wave breakthrough. (For more information, see: Amazon’s digital ad push threatens Facebook, Google.)
AMZN short-term chart (2015 – 2017)
The arithmetic view since the beginning of 2015 exposes a second upward channel, with four failed attempts to break in two years. Price action has spread from support to resistance over the past three months, marked by an uncapped breakout gap between $ 980 and $ 1,050. A recession starting from the current level would place that charting feature on the .618 rally retracement level, setting a possible magnetic target for the first quarter.
Volume on balance sheet (OBV) entered a historic build-up phase after the bear market, rising through a long series of new highs in July 2017, when the shares traded as high as $ 1,083. A higher September low generated new buying power at the end of the year, but the indicator has failed to reach a new high, indicating a bearish divergence that adds weight to a sell-off scenario in the first quarter.
Price action in range since November should guide short-term buy and sell signals, with an all-time high at noviembre 1,213 in November. 27, followed by a rebound and rebound that has failed to pierce the .786 recoil range. This sets $ 1,195 as a key level to watch for, with an investment at or near that level, increasing the odds of being admitted near $ 1,125 will break and trigger sell signals on a larger scale.