Think you’re too late for Amazon ($AMZN)? Check your timeframe. (April 23, 2020)
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I want to look at Amazon ( NASDAQ: AMZN ) and this is why: We are looking at this on the daily chart; this stock looks super, super extended. I really screwed the pooch on this because back here, in March, when the stock was down like this I didn’t understand why Amazon ( NASDAQ: AMZN ) wasn’t just running to new highs every single day because of the COVID virus; it just seemed like they’re in the sweet spot.
I didn’t get it and I am not going to turn around and say, “And see, I was right.” No, because I didn’t make any money on it. It would be one thing if I said I didn’t understand it, I knew this was wrong and so I just absolutely piled in and I made a gang of money on this stock. But I didn’t do that. I’ve made a little bit of money on it but just because it was another stock that was going up not because of my prescience or my innate trading abilities, I blew it.
And now, of course, we are seeing the stock run up here. They have got earnings in 7 days, right? So next week, and you are wondering, as I am, is it too late to get into the stock? My target on this, it still is, is 2675.00 (I will show you the way I got that in just a second), but this thing could hit 2675.00 before they even report earnings.
This was how I got to that number: Just looking at the width and the channel here and then assuming a breakout, which we have recently had; adding the width of the channel to the top of the channel and then projecting up more or less, so it’s 2675.00; how about if I make it 2700.00? That’s a guess, it’s not a forecast, it’s not a prediction, it’s not a prognostication it’s a guess based on the way the stock has worked.
You can sit here and say, “Well, It’s too late to buy this stock.” When I am wondering that I say, “Well, what’s my time frame?” And then you can look at this, it’s a multi time frame analysis of Amazon ( NASDAQ: AMZN ) based on the daily chart, on the weekly chart (we’ve just seen both of these), and then this is based on the monthly chart, and then the quarterly chart. Over the past few decades you could see what happened with Amazon ( NASDAQ: AMZN ), it has just trended higher and higher and higher.
So do you buy this stock? Well, what’s your time frame? If you are a patient investor there is no reason not to buy the stock right here right now. And the reason is that as you look at this chart if you are buying it here, do you think there is a danger of this being the top? If there is it would be historical because over the last 18 years the stock has just generally run higher and higher. A more appropriate time frame, in my view, to be looking at is the monthly time frame. This is a volatility squeeze; this stock had been trading in a pretty tight range on a monthly basis and it has just now broken out.
And so on that level I would say buy Amazon ( NASDAQ: AMZN ). You have to have a long-term time horizon, I am not talking about a day trade or even a swing trade where you buy the stock and then tomorrow when it is down at 2300.00 you are freaking out; it just even ticked lower as I am saying this. Just move the decimal point around, oh my gosh, I lost 90 points. No, that’s the difference between buying a stock at $23.90 and then the stock going down to $23.00; it’s just not that big of a deal.
It all just comes down to what your time frame is. And in this regard, I think you buy Amazon ( NASDAQ: AMZN ) if you are a patient investor. And then as soon as you buy it zoom right back out and look at this on a quarterly basis and let Jeff Bezos do the work for you, it’s just a lot easier that way.
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