Buyers have looked so punk lately that an ostensibly ‘easy’ rally target at 2082.36 looks temporarily out of reach. This would be an interesting development for AMZN, since its institutional sponsors have been on a buy-and-hold binge for years. Although they’ve let the stock fall occasionally in order to rip off widows and pensioners at fire-sale prices, this has usually occurred after the stock peaked at a Hidden Pivot rally target of intermediate importance. This time, it’s possible the unfulfilled target noted above may not be reached at all. In any event, we’ll focus for the time being on a lesser, downtrending pattern that projects to 1836.85. Consider it an odds-on bet if sellers take out p=1897.53. I’ve recommended bottom-fishing at a similar support in AAPL, but I am not recommending it in this stock because call options, even with just five days left on them, are extremely pricey. You can try anyway if you fully understand the bet, but I wouldn’t risk more than 0.20 to 0.30 per option. In practice, the only way you can do this is to rely on the midpoint support at 1897.53 to show very precise support — meaning not be exceeded by more than 0.30 if it’s going to work at all._______ UPDATE (Sep 24, 9:48 p.m. EDT): DaBoyz took down AMZN so viciously on the opening bar that there were few sellers left to impede the stock’s subsequent rally. It swam upstream against a weak Dow and S&P 500, but buyers will need to close AMZN above 1962, a ‘midpoint’ resistance, to demonstrate their sincerity._______ UPDATE (Sep 25, 9:04 p.m.): DaBoyz mounted their one-trick pony once again and rode it sharply higher, even as the Dow Industrials eased lower. The decisive move past midpoint resistance at 1962.08 has made a follow-through to at least 2059.15 very likely._______ UPDATE (Sep 26, 8:57 p.m.): The downward reversal begun late in Wednesday’s session could continue down to 1913 and not affect the bullishness of the chart shown in the inset. In fact, it would trip a ‘mechanical’ buy signal, stop 1864._______
UPDATE (Sep 30): No change. Continually buying shares in Amazon is perhaps the most deeply ingrained habit in the world of institutional investing. Someday the chimpanzees paid to throw OPM at this stock and a small handful of others will awaken to the thought, “What have I done!?” We can only speculate as to what will cause this dramatic change of heart, but it is predictable that it is coming. My hunch is that in the next recession, Amazon will be perceived as a rapaciously greedy monopolist, resulting in a public inquisition and regulations and oversight that will effectively rein in the company’s aggressive business practices. Even then, we must keep in mind that growth potential in computer and cloud-based services — a sector that Amazon dominates — will still be enormous.
