We all know Amazon.com. Who hasn’t heard about Amazon? Unfortunately, this stock is not accessible to the typical trader because it’s a costly stock. For this reason, most traders will use all kind of options strategies, mostly selling options to take advantage of time decay and being paid a credit up front for taking the trade. That’s what the typical trader can aspire to if interested in trading Amazon.
Amazon continues to evolve as a company and stock and has become a critical supply channel for many consumers in an age where COVID-19 has influences the world economies so much. Amazon is in an excellent position to grow both its retail marketplace business and its AWS cloud services segment. Amazon’s Prime members enjoy what is arguably the best fulfillment infrastructure including Prime shipping and expanded digital content.
S&P500, SPY, Nasdaq and QQQ ETF are breaking all-time highs. Most IT stocks are following suit and breaking the all-time highs as well.
Following the stock split announcements from Tesla and Apple, Amazon stock is likely to be the next to do so. The split will not affect the technical analysis presented below though. But considering the current price of the Amazon stock, it would seem like at least a 10:1 stock split would be the right way to go.
Although investors know that stock splits don’t add any value on a purely economic basis, they can definitely provide a sort of a psychological lift.
Take a look at Amazon supply and demand technical analysis below. You will see Amazon’s monthly timeframe and a strong demand imbalance located around $2,500 per share. Will Amazon AMZN stock pull back so low? I don’t know, but after such a strong impulse we usually see a much more significant retracement and correction, generally to the origin of the move. It could take a few months for such a correction to happen and Amazon could keep on rallying a bit more for a couple of more months. The forecast provided below for Amazon stock is a long-term, short-term and intraday stock strategies will allow you to trade on the way down.
Should we buy shares of Amazon right now in September 2020? Definitely not. The stock is very costly and we are expecting a bigger correction.
This is the kind of price action technical analysis you will learn in our trading community. You will learn how to locate new supply and demand imbalances and trade without using any indicators, no news, no fundamental analysis, no earnings announcements, no volume or VSA analysis. Just supply and demand imbalances for Amazon stock.
Trading supply and demand imbalances are ideal for beginners and those with a full or half time job, you won’t need to stay in front of the computer all day long trying to move price action with your mind.
As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Once a big timeframe imbalance has gained control, earnings do just the opposite and react strongly to those imbalances. Why is it that you see positive earnings and then the underlying stock drops like a rock, or a negative earnings announcement and the stock rallies like a rocket out of control? You are probably missing the fact that there are big imbalances gaining control.
Unless you are doing very short term trading and scalping, you should not worry about fundamentals or earnings announcements for Amazon stock.
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves, this game has got a name and it’s called the waiting game. We need to patiently wait for the correct scenarios and setups to happen and wait for the price to pull back or dip into the price levels we want to trade, in our case these price levels are made of supply and demand imbalances.
If you want to learn how to trade using our supply and demand trading strategy, join our supply and demand stock trading course.
There are several ways of buying stocks and futures. When trading stocks, you can buy shares of the underlying stock or use options strategies to go long or short at these specific supply and demand levels, long calls or long puts or spreads. You can even buy an Amazon CFD (contracts for difference) if you are in a country where it’s allowed.
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