This article originally appeared on RealMoney.com on Sept. 5, 2014 at 9:30 a.m. To read more content like this AND see inside Jim Cramer's multi-million dollar portfolio for FREE... Click Here NOW.
Even though Amazon (AMZN) has had a nice rally from the August low, I'm seeing a very important hurdle in this stock that needs to be cleared if that move is going to continue. My one other concern here is that the price is currently testing and hanging below the 200-day simple moving average. Also note that both the S&P 500 and Nasdaq indices are pretty much extended, meaning they are in position to correct to the downside.
Now, looking at the daily chart below, you can see time-based resistance to the current rally. That is because the current rally -- which lasted 23 sessions as of Thursday's high -- is currently very similar in timing to the rallies into the July 24 and June 11 highs. These lasted 23 and 22 sessions, respectively.
When each of those prior rallies ended, tradable declines were produced. In fact, time cycles will often terminate a trend, as I discuss regularly. So I don't know whether that pattern will repeat this time around, but we should certainly watch for indications of a rally failure right now. Aside from the symmetry time-based projections, there are also two other time cycles that show up on Sept. 4 and Sept. 5.
STOCKS TO BUY: TheStreet Quant Ratings and Dave Peltier's Stocks Under $10 has identified a handful of stocks that can potentially TRIPLE in the next 12 months. See them FREE today... Click Here NOW.