Amazon (AMZN) has been an amazing investment story, both the fundamental story but also the technical analysis story. Investors and traders have been rewarded by buying corrections and adding on strength.
Let's look at the current state of the indicators and charts to see is the current pullback is worth buying too.
In this daily bar chart of AMZN, above, going back 12 months, we can see an uptrend interrupted only by consolidations and corrections that were all buying opportunities in hindsight. Prices have stayed above the rising 200-day simple moving average line the entire time. Dips to the rising 50-day moving average line were buying opportunities too, with November-December consolidation pattern the exception.
The On-Balance-Volume (OBV) line moved up from April to the end of September, confirming the price advance and signaling aggressive buying. The OBV line declined from October to the end of December as prices corrected, and has been on the rise again since the beginning of 2017.
The Moving Average Convergence Divergence (MACD) oscillator has been in a bullish mode for much of the past 12 months and has narrowed recently towards a possible crossover and take profits sell signal.
In this weekly bar chart of AMZN, above, we can see the advance of the past three years. The chart is bullish and all our favorite indicators suggest further gains. AMZN is above the rising 40-week moving average line.
The weekly OBV line has been moving upward with the price action, and the MACD oscillator has been above the zero line for more than two years. The MACD oscillator is pointed up after a fresh go long signal in January.
In this Point and Figure chart of AMZN, above, we can see the uptrend from the 2016 low. We can see the consolidations and fresh breakouts. The most recent consolidation and breakout gives us an upside price objective in the $1015 area.
Bottom line: AMZN has become one of those must-own stocks, and traders could use this current pullback to add to long positions or to start a new position. A sell stop below $830 looks appropriate at this time.
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