Markets – Macro – Technicals

AMZN

One thing we know about tech is that people’s appetite for tech stocks can be insatiable and no rhyme or reason can dissuade people from buying them no matter the valuations. It’s like arguing with a drunk in a bar. Momentum is what matters and it won’t stop until it stops. That’s what the ’99/00 bubble was all about.

This past week I’ve outlined my general concerns on tech in Beast Mode as tech was making new highs & $AMZN squeezed above the $900 level, yet people kept buying it all the way to $925 before it finally retreated.

Since then it closed the week below $900 on Friday leaving a sizable weekly reversal candle. Whether this is the top in $AMZN I can’t say, what I can state however is that, much like most tech, these highs came on a big fat negative divergence.

In a market where risk no longer exists pointing out such risk may be quaint, but the last time $AMZN showed such a large weekly negative divergence it dropped below its weekly 50MA which currently sits at $777. Just below is the .382 Fib level off of the 2016 lows or $751. Unless the stock makes new highs this may well be a technical target for the stock to visit in the weeks/months ahead:

All content is provided as information only and should not be taken as investment or trading advice. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. For further details please refer to the disclaimer.

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