Stock of the day: Amazon

Stocks in the US started a new week with a correction. Even the biggest companies fell this week, particularly those listed on the NASDAQ. In today’s analysis, we bring you an e-commerce hegemon – Amazon, where the situation is also bearish.

On the Amazon chart, you can see a double top formation with the local highs marked with a blue line. Since the second top was reached in mid-November, the price has steadily dropped. On Wednesday, sellers managed to break a crucial dynamic support, which was a red up trendline connecting lows since March. That breakout is actually why we’re here because it gives us a mid-term sell signal.

The target for the drop is on the horizontal support around 2900 USD (green), which has already proven to be effective during the second half of 2020. Chances that we’ll reach that level are quite high unless the price jumps back above the red line, which would create a false bearish breakout and as a consequence, a strong buy signal.