Chart of the Day: Amazon Shows Major Corrective Move
The name is down about 20% from recent highs, which is technically a bear market for the stock.
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Amazon AMZN has been hit very hard like most of its Magnificent Seven brethren. Since posting earnings in late January the stock has been cycling down, with lower highs and lower lows. Toss in strong volume days on the down sessions and we can understand why the candles have shifted to pink/purple. That is the GoNoGo composite of indicators, which is bearish.
Notice how strong the downtrend is currently. The ADX is ticking high at 40, which says the strength of the trend is extremely high (pane 3). Could it fall from here? Sure, but that does not guarantee Amazon moves up, it simply means the stock would be falling at a slower pace until the trend changes.
Money flow is bearish but is improving; above zero would be a good start for the bulls. All in all, we see this corrective move in Amazon being closer to the end as the stock bounces off the 200-day moving average. This might be a good spot to scoop up more shares if you are light.
We like Amazon and rate it a One in TheStreet Pro Portfolio, or "buy at anytime."
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At the time of publication, TheStreet Pro Portfolio was long AMZN.
