Amazon’s stock is threatening to break below a trendline that has supported it during its epic 2 and a half year run. When historians look back at the current period in the stock market, one of the stocks that doubtless will define the era is Amazon (AMZN). Not only does the company seem bent on world, or at least U.S., domination but its stock has reflected it as well. From its IPO in 1997 until early 2015, AMZN’s stock price essentially doubled every 2.5 years. In the 2.5 years since, the stock has hit another gear.
By October 2015, AMZN’s stock price had doubled again. And at its high last Thursday of 1083, it had nearly doubled again. Over the last 3 days, however, the stock has not been so hot, losing almost 100 points from its high of last Thursday. The pullback also has the stock testing an important line on AMZN’s chart.
Since its January 2015 low, AMZN had been supported by a well-defined rising trendline (using a log chart). On about a half dozen occasions during the past 2 and a half years, the stock has bounced off nearly precise tags of the trendline.
As of today’s close (988), the stock finds itself testing the line (currently intersecting near the 990 level) once again...
As this trendline has served as near-perfect support during Amazon’s dramatic 2 and a half year run, it is obviously an important technical line to monitor for the sake of the stock. So will it hold? Obviously, we have no way of knowing for sure, although, we are a bit concerned about the now 3 touches of the trendline in the past 2 months alone. The increased frequency of touches may put the trendline in danger of being broken.
Beyond just AMZN’s stock, however, this trendline test could hold implications for the market at large. AMZN has served as one of the steady leaders during this portion of the bull market. If it breaks down, might it be a bad sign for the overall market?