Hi Traders! Today I share with you my Amazon technical analysis and forecast post. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe technical analysis on Amazon in order to find possible trading opportunities. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis now from the highest timeframe which will be the daily chart here.
On the daily chart the price is moving inside a range which started on 2nd September 2020. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which is respecting this range so far has reached the top of it, respected it and is bouncing lower. Currently the price has reached the middle of this range, the price still has room lower towards the bottom of it and there are no signs opposing this bearish view. Also based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this bearish view.
On the H4 chart we have a bearish divergence that has formed between the first high that has formed at 3431.55 and the second high that has formed at 3552.20 based on the MACD indicator. The price then moved lower and broke below the last low at 3300.92 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may expect corrections and then further continuation lower. Currently it looks like a correction is happening and until the strong resistance zone (marked in red) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further.
Amazon D1(Daily) Chart Analysis
Amazon H4(4 Hours) Chart Analysis
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
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