When stocks break through important resistance levels, there tends to be some profit-taking. Sometimes, this selling pushes the stock right back down to the level.
That appears to be the case with Amazon.com, Inc. AMZN.
After breaking out through $3,520, it has been trending lower. The shares are about to send an important signal.
If the $3,520 level converts into support, it could set the stage for a new uptrend to form. This conversion happens when investors who sold at $3,520 decide to buy their shares back after they trade higher. They don’t want to lose money so they place their buy orders at their selling price.
In this case, $3,520. If there are enough of these orders, it will create support. If there is little or no support at this level, the downtrend could gain momentum.
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