AMZN missed on earnings yesterday and fell out of bed today. Not a problem for us as we already sold 3 days ago! 🙂 Why? Because we already projected these price targets weeks ago to our members! Just like we did with AAPL this week: no real surprise here. That’s the power of what we do: objective factual analysis!
But, is all hope lost? No. As long as price remains above $740 it still has a good shot at extending higher into the $900s. Why? Because then AMZN would only have completed wave iv of 3 and then we still will get wave v of 3, wave 4 and all of 5: see target boxes (not to scale).
Figure 1: AMZN daily chart
The black horizontal line shows the Bull/Bear line in the sand. If price over the next few days crosses it, then the Elliot Wave count will have to be shifted to the “black 5” at the recent All Time High. This will mean price will eventually go much much lower. We’ll cross that bridge when we get there.
In the mean time the weekly chart is not much happier: we have negative divergence on the MACD (the recent MACD high is lower than the high made late-December last year, while price is now higher) indicating loss of momentum. In addition, also here the weekly A.I. is on sell.
Figure 2. AMZN weekly chart
Lastly, price fell below the black uptrend line in place since 2012. However, money kept pouring in as the OBV followed price. This is a good indication. All the weekly simple moving averages (colored lines) are all also still pointing up with the fastest SMA above the slowest.
In conclusion: AMZN bulls have their work cut out for them and are staring into the abyss. But, before all hope is lost, $732 needs to go first followed by $474 (its low in February) So that’s some ways to go before the Bears can claim victory.