AMZN got whacked coming out of the gate at yesterday's opening gong, but it staged a very impressive recovery (white arrow), going positive with the Dow and NASDAQ still down over 100 points and over 20 points, respectively.
At this juncture in trading, AMZN was forming a possible Cup & Handle, better seen in the next chart. I've been watching AMZN very closely this week. I very much liked the recovery off the morning lows and particularly liked the Cup & Handle possibility, so I went large and bought 4,000 shares of AMZN at an average cost of 176.19.
Classically, Cup & Handle patterns have rounded bottoms in the "cup" portion of the pattern. That isn't always the case. Sometimes the cup is a down...up...down...up jagged affair, like this one. Sometimes they're "V"-shaped: Straight down, then straight up, or nearly so.
The cup portion of this pattern is a Bull Flag/Falling Channel (in orange), however one wishes to view it. The important thing is that it broke out to the upside, established the second "lip" of the cup (white horizontal line) and was establishing the handle portion of the pattern which, quite often, is a pattern itself. This one is a Symmetrical Triangle (in yellow).
The Handle broke out (yellow arrow), putting rougly 178.10 IN PLAY, then the entire Cup & Handle pattern broke out (white arrow) immediately thereafter, putting roughly 179.60 IN PLAY. When patterns break out into immediate resistance, like this one did, it's preferable for it to come back and retest the breakout. If it can form another pattern, like the one in green (a Falling Channel), then break out again, all the better. Upside screamers, without any structural basis for a rally, tend to get called back.
The rally off Green #4 at the second yellow arrow is about as good as it gets, technically. It not only established the fourth data point for the Falling Channel (in green), that fourth data point was a successful retest of the top of The Handle, which was the Symmetrical Triangle pattern (in yellow).
After planting a foot there, The Bulls broke out of The Falling Channel, for a fourth bullish breakout on the session, rallied to 177.69, where they stopped to form and break out of a fifth pattern, the Symmetrical Triangle (in blue), then rallied to 178.17 where the target of roughly 178.10 got MADE at Purple #1. Lovely.
Heading into the final half hour of trading before the three day weekend, a Descending Triangle emerged (the pattern in purple). I had held my shares when the 178.10 target got MADE since The Cup & Handle target of roughly 179.50 still was IN PLAY, but time was running out on the clock and I wanted to take profits and get out by the close.
Descending Triangles "tend" to be bearish, but they aren't always. In this case, the session was wildly bullish with FIVE bullish pattern breakouts and it seemed a bit much to expect a sixth one in the final thirty minutes. I cashed in the 4,000 shares at an average of 177.70, wanting to protect profits in case the Descending Triangle broke down below its identical lows of 177.60, in which case I might be forced to sell into fast market conditions on the downside.
Curses! Curses! Curses!!!
A SIXTH bullish breakout on the session! Oh, well. At least we've got a three-day weekend to find all of the people who told us that Descending Triangles ALWAYS are bearish, and show them this chart. LOL.
The high on the session was at last horizontal resistance (horizonal red line)
Interesting action in the RSI chart. On January 12, the 13RSI came back to Bullish Syncronicity with its "shadow," the 21 RSI, then yesterday it got a bounce higher, so that looks fine. It needs to continue higher and the 21/34 RSIs, which failed on January 6 at Bearish Synchronicity (the most recent red down arrow) needs to turn positive.
Enough with the retests of the top of the Falling Channel. Git Going to the upside!
My trades were filled in annoying tiny little batches, so I have to post the executions on two pages.
Purchases.
Sales.
Gain: $6,000.
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