Look at Amazon’s stock price. It’s been on a tear for almost four years now.
First, some context…
When I look at stock prices the first thing I do is see where we are in relation to October 2007. That’s when the broad market peaked ahead of the credit-crunch stock crash of 2008.
Many stocks have failed to recover to their October 2007 levels. Some have made an 80% recovery… some 90%… and some are just now making “new highs.”
But for Amazon, breaking above October 2007 highs was no big deal. It did that in 2009. And today, Amazon stock trades 156% higher than it did at its 2007 peak.
How about that for a recovery!?
That said, Amazon’s stock may face headwinds as soon as six weeks from now. Here’s why…
Amazon has been trading in a channel since 2009. When it hits the bottom of the channel, it bounces higher. When it runs into the top of the channel, it falls back. Scrutinizing this channel allows me to figure out when Amazon may be due for a pullback.
From my analysis, Amazon could hit resistance in about six weeks.
Over the past year, Amazon has moved about $5 per week (from Open to High). With AMZN now trading around $260/share, the top of its channel at $290 is just six weeks away… if the current uptrend continues. And that’s when Amazon will be due for a drop.
That’s the technical perspective, at least…
But we’re also quickly nearing the holiday shopping season. Time will tell whether Amazon’s new tax-charging policy will deter this year’s shoppers or not. If consumers pull back and Amazon’s sales slip… the top of this channel could become a brick wall, halting Amazon’s impressive stock gains.
If you haven’t done so already read the Survive & Prosper issue on “Your Online Sales Tax Cheating Days Are Coming to an End.”