Up first is online retail giant Amazon.com ( AMZN), a name that I last talked about a month ago. At the time, Amazon was forming a long-term rounding bottom pattern, a setup that triggered on a move above the $285 level. Well, that breakout happened earlier this month. So how do you trade it from here?
Since the breakout, Amazon has moved almost 8% higher without a single down day -- until this week, that is. With a consolidation in AMZN that mirrors the one in the S&P this week, there's still a trade to be made here. That's thanks to the short-term rectangle pattern that's been forming in shares.A rectangle pattern is formed by a pair of horizontal resistance and support levels in shares of a stock. It gets its name because it essentially "boxes in" shares. For AMZN, resistance comes in at $310 and support is down at $305. That's a super tight range for such a pricey stock, but the implication is that traders will get a much quicker trade signal here. Buyers should wait for a move above $310 before jumping into AMZN; if shares slip below $305, it's a sell.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV