AMZN: Topping Formation Incomplete with Volatility

13 dic 2018

AMZN has a topping formation which is incomplete at this time. Incomplete means that the stock has not broken through the strong nearby, short term technical support level YET. It may or may not. The stock can always shift sideways as BA did, as an example, to pattern out the excessive stock price uptrend created by speculation. Trading range corrections, as opposed to down-trending corrections, take much longer because the stock price remains well above the company’s fundamental value. The financials have to catch up to the price per share. For AMZN, there is also rotation, aka lowering of stock shares held by the Giant Dark Pools, evident in studying the price trend against the Accumulation/Distribution indicator. This increases the risk of sudden downside action. For now, buybacks and smaller funds buying on a dip are holding the stock up. Watch for increased volatility as a precursor to more downside action.