Here's The Level Amazon Must Hold For This Bullish Pattern To Become Dominant

Amazon.com, Inc AMZN was trading lower Wednesday after sliding over 4% from Tuesday’s opening price to close flat.

The e-commerce giant has plunged 42% since opening the trading year in January and on Nov. 9 reached a 52-week low of $85.87. The tech sector has been hit hard this year by soaring inflation and a series of four consecutive 0.75% Fed rate hikes, for a total of six interest rate hikes since 2022 started.

Sentiment was recently boosted slightly after consumer price index data for October showed inflation ticked lower, causing the U.S. dollar to hit a fresh three-month low, which may positively affect multinational tech companies.

The Saudi Arabian sovereign wealth fund has been buying the tech sector dip and recently purchased shares in several companies including Amazon. The fund most likely has a long-term outlook for profiting from its position.

For the shorter-term, Amazon has started to show some strength, negating a fairly consistent longer-term downtrend on Nov. 10 with the formation of a higher high.

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The Amazon Chart: Although Amazon negated its downtrend, which began on Aug. 16 when the stock failed to regain the 200-day simple moving average, Amazon hasn’t yet confirmed a new uptrend by printing a higher low. If Amazon can spike up over $103.79, Tuesday’s low of $97.34 may serve as the higher low to confirm the trend.

• Amazon may have printed a triple bottom near the $97 area when Tuesday’s price action is paired with similar price action on Friday and Monday. The eight-day exponential moving average (EMA) is also trending at that level, which may add support in order to help the pattern become dominant.
• The weak price action on Tuesday took place on lower-than-average volume, which indicates consolidation as opposed to the bears being firmly in control. About 111.34 million shares of Amazon exchanged hands on Tuesday compared to the 10-day average of 115.4 million.
• Bullish traders want to see Amazon hold above the eight-day EMA and then for big bullish volume to come in and push the stock up to print a higher high. Bearish traders want to see Amazon fall under the eight-day, which could put the stock in danger of filling a lower gap between $89.47 and $91.65 that was left behind on Nov. 10.
• Amazon has resistance above at $99.88 and $109.30 and support below at $95.49 and $92.18.

See Also: Jeff Bezos Says Don't Buy That New TV, Save Your Money Instead: Here's Why

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