AMZN breaks below 20-day moving average for the first time since December 13, 2019
Amazon.com Inc. (AMZN) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, AMZN finished the week -0.17% lower at 1861.64 after losing $22.94 (-1.22%) today, slightly underperforming the Nasdaq 100 (-0.82%). Today's close at 1861.64 marks the lowest recorded closing price since December 31, 2019. Closing below Thursday's low at 1872.76, the share confirmed its breakout through the prior session low after trading up to $25.32 below it intraday.
Daily Candlestick Chart (AMZN as at Jan 24, 2020):
Friday's trading range has been $47.52 (2.51%), that's far above the last trading month's daily average range of $30.10. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AMZN.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. The last time this happened on January 17th, AMZN actually gained 1.46% on the following trading day. Even with a strong opening Amazon. com closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 1847.44 earlier during the day, the stock bounced off the key technical support level at 1860.00 (S1). The failure to close below the support might increase that levels significance as support going forward. The market closed below the 20-day moving average at 1879.16 for the first time since December 13, 2019.
Although AMZN is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Amazon. com. Out of 142 times, AMZN closed higher 57.75% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 61.97% with an average market move of 2.27%.
With three out of the other four FAANG Stocks closing lower today, the ones that stand out on the negative side are GOOGL losing -1.25% and FB closing -0.83% lower. On the flipside the best performer has been NFLX closing 1.02% higher. Read more