Amazon Trends Higher As Golden Cross Looks Set To Form: The Bull, Bear Case For The Stock

Amazon.com, Inc AMZN was trading higher Wednesday, continuing in a strong uptrend after printing a higher low on Monday.

The e-commerce and streaming giant has been trading in the pattern since March 13 and has one of the strongest uptrends of all the mega-cap names. An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.

The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods.

Traders can use moving averages to help identify an uptrend, with rising lower time frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.

Rising longer-term moving averages (such as the 200-day simple moving average) indicate a long-term uptrend.

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The Amazon Chart: Amazon crossed above the 200-day simple moving averge (SMA) on May 10 and has been riding up the eight-day exponential moving average (EMA) since May 5. The 50-day SMA, which is curling upward, will eventually cross above the 200-day SMA to form a golden cross if Amazon continues to trend higher.

• Amazon’s most recent higher low was printed at the $109.25 mark on Monday and the most recent confirmed higher high was formed on May 11 at $113.28. Technical traders may have predicted Amazon would move higher on Tuesday and Wednesday because on Monday, the stock formed a doji candlestick, indicating an upward reversal was likely.
• Traders can watch for Amazon to print its next higher high over the coming days because the stock’s relative strength index is measuring in at about 67%. If Amazon rises on Wednesday, the RSI may move over 70%, which would indicate the stock has entered overbought territory and a pullback is likely.
• Amazon has resistance above at $117.16 and $125.93 and support below at $109.30 and $99.88.

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