We’ve used Amazon as a stock-market bellwether for months in lieu of the late, great Apple, and it has yet to steer us wrong. This is a company, after all, that sells real things, that builds and operates real warehouses and that pays billions and billions of dollars to engage a vast fleet of actual trucks, planes and trains for deliveries. In short, Amazon is a real business, and not some pumped up cloud-based concept designed to enrich venture capital’s hoodlum class rather than benefit the retail public. I mention this because Amazon shares, having been short-squeezed nearly 20% in the last two weeks, look like they’re about to rampage again.
The stock barely corrected Monday’s $25 gap-up opening, leaving shorts with no alternative at the close but to panic and get ’em in as soon as possible. If that proves to be the case, the stock is on its way to the 578.35 target shown. We should keep close tabs on this, since this stock by itself has enough power to drag the entire U.S. stock market along for the ride.
Traders looking to get long belatedly, or shorts clever enough to trade ‘against the box’, can use a mechanical bid from either p=546.85, or p2=562.60 with the respective, applicable stop-loss. You should attempt this only if you are comfortable with the few simple rules governing Rick’s Picks‘ mechanical trades. If you would rather just spectate, set screen alerts at p and p2 to tell you when it’s time to cheer Wall Street’s version of the Roman circus. _______ UPDATE (10:31 p.m. EST): AMZN eased lower, restraining stock-market bulls from extending Monday’s short-squeeze rally. The bellwether idea remains valid and should be used daily to get a handle on investors’ mood shifts, to wit: as Amazon goes, so goes the market._______ UPDATE (February 24, 9:24 p.m.): If AMZN pushes decisively past the 555.80 ‘midpoint pivot’ shown, the wilding spree begun earlier today could continue all the way up to 578.45. This has the potential create ‘mechanical’ buying opportunities at p, p2 or both, so be sure to set alerts on your intraday charts to tell you when. _______ UPDATE (February 28, 8:21 p.m.): There are several bullish ABC patterns pushing the stock higher right now, two of which are shown in the chart (see inset). This makes a ‘mechanical’ trade using a bid at x=551.63 (stop 545.28) of the smaller pattern all the more enticing. Using the 578.45 target of the larger pattern as a price objective yields a theoretical risk:reward ratio of near 1:5._______ UPDATE (March 1, 4:07 p.m.): Surprise surprise. At the top of today’s so-far 27-point rally, AMZN hit 579.25. Chat room reports suggest that some subscribers jumped on this move from the start. Way to go!_________ UPDATE (March 4, 1:39 a.m.): Time to look at a bigger picture, since AMZN has had little trouble pushing past minor Hidden Pivot resistances. This chart shows a clear path to as high as 609.80 in the weeks ahead, with potential ‘mechanical’ buying opportunities at 571.48 (already triggered, stop 565.09) and p2=590.64.