Evercore ISI's Chartist Sees Amazon Touching $510 Soon; Here's How

Shares of Amazon.com, Inc. AMZN are up almost 50 percent since last year and are yet to see a significant correction. Fundamentally the company has a lot going for itself with its much promoted sale "Prime day" where Amazon prime customers will be getting massive discounts and deals throughout Wednesday.

Amazon is also scheduled to declare its second-quarter earnings next week, which according to Rich Ross, Managing Director, and Head of Technical Analysis at Evercore ISI can be the fundamental catalyst that takes the stock to $510 level. Ross was on CNBC Wednesday to explain how he sees Amazon reaching that level.

The Technical Reasoning

"We are going to start back here at the 2014 high and you can see the stock correct 20 percent," Ross said. "But importantly it holds this key long-term moving average, the 150-week we then put in a series of bullish flags with a sharp move into the pattern followed by some sideways consolidation. We then get another sharp move coming out of that consolidation and we set up another bullish flag."

He continued, "Now, if history repeats itself we are going to get a move coming out of this pattern which roughly approximates this move here (the second sharp move), now that's about 70 points. We tank that up on this $440 and that brings us up to $510. Once again with earnings next week that could be the fundamental catalyst that gets this stock going to our $510 upside technical price target. So, that's how I get there. I like the stock, there is another 10 percent upside"