What's Ailing Amazon?

Jeffrey Cooper  Jun 16, 2009 4:10 pm

What's Ailing Amazon?
 
A simple case of profit-taking into quarter's end?
 

What’s ailing Amazon (AMZN)? Even during the tech snapper of the usual suspects this morning, AMZN participated for all of 10 minutes; the other horsemen are still galloping in the green.

One answer is that Amazon had been hyperventilating like Fay Wray in the palm of King Kong's hand: It scaled the advance up from March ahead of the pack. See the weekly chart here:


Click to enlarge


So, it may be a simple case of profit-taking and distribution ahead of quarter's end.

The daily chart hasn't turned the 3-day chart down yet, but a break of yesterday's lows today will turn the 3 day chart down on 3 consecutive lower lows.

The daily chart from the beginning of 2009 shows 2 complex consolidations at the 50-day moving average, which currently stands at 80. With Friday’s option expiration looming, this 80-level coinciding with the 50-day beckons.

                                 
Click to enlarge


The 10-minute chart for the last 3 days shows a mini inverse head and shoulders with a possible inverse right shoulder (bullish) near 82. If the right shoulder is snapped, the expectation would be for a quick drop toward 80.

                                 
Click to enlarge
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06-17-2009, 9:11 am
I love Amazon--I think it's a great, great company and I go nowhere without my Kindle. But there are cautionary thoughts connected to the stock's aggressive valuation.

Specifically, the Kindle is a great thing, but it is fra
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