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Amazon (AMZN) has been trading inside a very narrow consolidation pattern for the last four weeks. While the stock has been working through this healthy action, underlying support has been gaining strength.

Following Thursday's trade, Amazon is beginning to pierce the upper band of what now appears to be a bull flag formation. If this breakout-type move gains traction this week, Amazon investors should expect a fresh rally leg to begin.

Amazon's 2015 bull run came to an abrupt halt on Jan. 4. Two days prior, the stock closed at new highs and appeared ready to put some distance on heavy supply near the $685 area. As January's selloff began, it was obvious that a major spike high was in place at the failed breakout on Dec. 29.

The stock tumbled nearly 22% over the next two weeks before mounting an impressive pre-earnings rebound. This rally featured a huge 9% surge just prior to the fourth-quarter report. But as investors sold the stock aggressively immediately after the disappointing numbers, another ugly spike high was left behind. This marked the start of the second leg of Amazon's first-quarter selloff.

Amazon dropped another 25% in the week and a half after earnings. The stock finally found its footing near the $480 area after the selling pressure completely exhausted itself. The bounce that followed carried the stock back above the 200-day moving average, where it has consolidated for the last four weeks.

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After its latest streak of four straight gains, Amazon is poised to break out of this formation and begin a new rally leg. A close above the early March high of is the key to this move. Until then, investors should consider the stock a low-risk buy as long as it remains above the $550 area. A close back below this level would drop shares back below a very solid moving average formation, indicating that the consolidation has more work to do.

Another key overhead level to monitor is near $597.50. The stock's ugly post-earnings breakdown gap is here. Amazon may need a bit of back-and-fill action before this heavy resistance level is cleared.

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Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.