Is Amazon's Stock Ready To Bounce Back?

Amazon.com Inc. AMZN shares are trading higher Tuesday on what looks to be a rebound after a large gap down Monday.

The stock fell back into the ascending triangle pattern it looked to have broken out of. Amazon's stock was up 0.83% at $3,359.01 at last check.

See also: 9 Amazon Analysts Break Down Q2 Earnings: 'Comps Tougher Than Expected'

Amazon Daily Chart Analysis

• The stock looked to have broken out of an ascending triangle pattern, but after earnings saw a large gap down that pushed it back into the pattern.
• The stock trades below the 50-day moving average (green), but above the 200-day moving average (blue), indicating the stock is likely facing a period of consolidation.
• The 50-day moving average may hold as resistance, while the 200-day moving average may hold as support.
• The $3,500 price level has held as resistance multiple times in the past, while the higher low trendline has held as support multiple times. These key levels may continue to hold until the stock either breaks above or below them.
• The Relative Strength Index (RSI) dropped after the earnings announcement and now sits at 35. This means there have been many sellers moving into the stock the past few days.

What’s Next For Amazon?

Bullish traders are looking to see the stock stay above the higher low trendline and continue to move higher. Bulls would then like to see the stock break above resistance and push higher.

Bearish traders would like to see the stock fall below the higher low trendline and be able to hold below it. This could let the stock see a further bearish push and change of trend.