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Asset Watch
Tuesday April 30, 2024
Amazon recorded a weekly hammer candle last week, which is marked by a long wick (intraweek sell-off) before the stock closed near the highs. The bullish pattern typically precedes reversals and highlights investors’ enthusiasm to buy the small correction.
Last week’s reversal also allowed Amazon to close above its 10-week moving average, which has been a solid momentum indicator since the stock bottomed in late 2022. Outside of a few breakdowns, the 10-week MA has been a reliable support level that has rewarded the bulls for scaling in near the area.
A long position remains justified if Amazon trades above the key level. If not, a stop-loss order could be placed a few percentage points below the 10-week MA to mitigate losses and protect against false breakdowns.
So, should you embrace the fundamental risk and position for an Amazon uprising, or wait until after the earnings release to make your move?
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