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Thursday morning, Amazon.com Inc.  (AMZN) announced it is offering free shipping for all orders made through Dec. 18, one week before Christmas Day. If you are a prime member you get an even better deal; free same-day shipping into Christmas Eve. These are reasons for shoppers to begin searching for those last-minute gift items. It's also an incentive to spend $119.00 for an Amazon Prime membership.

The stock closed Wednesday at $1,663.54 and solidly in bull market territory, up 42.2% year to date. The stock set its all-time intraday high of $2,050.50 on Oct. 3. Since then, it fell deep into correction territory, 18.9% below this high.

When I profiled Amazon on Dec. 5, I suggested that the stock be bought below its 200-day simple moving average then at $1,700.00 down to my semiannual pivot at $1,546.97. Since then, the stock traded as low as $1,590.87 on Dec. 10, and has stayed below its 200-day SMA, now at $1,704.74 . The stock should have opened above that level on the news of free deliveries. This is necessary to solidify the "Santa Claus Rally".

It may take a little time to confirm renewed momentum but a close this week above $1,678.22 will set the stage to breakout above the 200-day SMA.

Be patient and stay with the position started a week ago from below $1,600 and add to the position on the positive weekly close.

The daily chart for Amazon

Courtesy of MetaStock Xenith

The daily chart for Amazon is showing a warning unless the stock can pop above its 200-day SMA at $1,704.74. The risk shown is the formation of a "death cross" where the 50-day declines below the 200-day indicating that lower prices lie ahead. This warning can be offset if the weekly chart becomes positive.

Above the "death cross" is a horizontal line at $1,804.55, which is my quarterly risky level. Below the "death cross" is a horizontal line at $1,546.97, which is my semiannual value level. 

The weekly chart for Amazon

 

Courtesy of MetaStock Xenith

The weekly chart for Amazon will end the week positive if the stock closes above its five-week modified moving average of $1,678.22. The 12x3x3 weekly slow stochastic reading is projected to rise to 32.67 this week up from 29.29 on Dec. 7.

Investors should add to positions on weakness to my semiannual value level of $1,546.97 and reduce holdings on strength to my semiannual pivot at $1,804.55.

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Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.