Warning - TLDR
My cuz is a big chart guy. I asked him “What are your thoughts on AMZN? Is the chart telling you it should bounce back, or is there more potential downside?”
His reply (there were also charts that I couldn’t paste):
I think for the Long-Term, this was a gift. One thing that seems to hold true is that every reaction in the market is an overreaction, especially for companies with solid balance sheets (not so much for speculative plays like growth stocks, IPOs, penny stocks, crypto, etc.)
Looks like we could test the daily 200 around 3270. We opened on Friday just underneath the 100ma on the daily chart, tested it - and it acted as resistance. So, that tells me that buyers are not jumping at that price.
On the weekly, going back to 2011 - the weekly 55ema and 100ma have been solid support to bounce off, only being breached 2x (2015 and 2000 market crash. I don't see anything in Q1 2015 that would have causes the drop. Maybe ER).
If it were me, the weekly 55ema (green) would be a solid entry, as long as we are finding some buying there, and not just blowing through it. I would only think that's likely if overall market was doing the same, but even then, AMZN already dropped a lot.
Obviously there's always the threat of a more serious market pullback or crash , but sentiment seems bullish despite all the constant fear. An investor could theoretically put a SL underneath the weekly 100ma right there if they wanted to enter there and got a solid bounce. Ie: Risk 2% on 10k if worried about a further drop. Doing that always invites the risk of getting stopped out and then the stock taking off upward though.
The 2x it breached the weekly 55 in this screenshot was the market correction in late 2018, and market crash in 2020.
But I do think AMZN was consolidating in a range for about a year. So definitely a long-term hold.