Alert: Amazon Bear Flag Hitting Resistance Point

Amazon.com, Inc. AMZN is moving into a key resistance point on the daily chart. This is called a neck tie and occurs when two moving averages converge. In this case, the 20 and the 50 moving averages. In addition, a classic bear flag formation has formed after Amazon reported earnings that missed Wall Streets expectations. The stock tumbled from a closing level of $184.45 to a low the next day of $166.90. Since then, the stock has rebounded higher, moving to a high today of $178.90. At this current level, the stock is kissing the neck tie. This can be seen on the chart below. In addition, note the classic in spirit of bull flag formation. The combination of both these bearish signals, gives a high probability short signal. Should Amazon close above the neck tie, the play is negative. A close over $181.00 would complete it and an exit would be in order. These are classic swing trade setups. Gareth Soloway InTheMoneyStocks.com