Amazon Stock Is Breaking Out: Here's What Could Happen Next

Amazon.com Inc. AMZN shares were trading higher Thursday after the company announced its Prime Video and IMDb TV streaming services struck a multiyear licensing agreement with Comcast Corp’s CMCSA Universal Filmed Entertainment Group. Financial terms of the deal were not disclosed.

The stock was trending throughout the day on social media sites such as StockTwits.

Amazon Daily Chart Analysis

• Shares look to have broken out of what technical traders would call an ascending triangle pattern.
• The stock is trading above both the 50-day moving average (green), and the 200-day moving average (blue), indicating the sentiment in the stock is bullish.
• Each of these moving averages may hold as an area of support in the future.

Key Amazon Levels To Watch

• The ascending triangle pattern looks to have reached the end and broken out of the pattern; the stock is now making a large bullish move.
• The $3,500 level has held as resistance in the past. The higher low trendline built up to this level before the stock saw a breakout and started moving above this level.
• The higher low trendline has held as support throughout the duration of this pattern, this trendline may continue to hold as support after the pattern.

What’s Next For Amazon?

Bullish traders would like to see the stock continue to breakout and see a large bullish move. Following the bullish move, these traders would like to see a period of consolidation while the stock is able to hold its gains.

Bearish traders would like to see the stock fall below the higher low trendline. If the stock could hold the higher low trendline as resistance, then the stock could be ready to see a bearish push. Bears would also like to see the stock fall below the moving averages for a potential change in sentiment and a possible trend change.

Photo: an Amazon-branded plane. Courtesy photo.