This pullback in Amazon ($AMZN) gives us the entry we’ve been waiting for – February 10, 2025
Dan Fitzpatrick here at StockMarketMentor.com. I want to look at one of the “A’s” in the Super 7, as I call them just because nobody else does.
Amazon ( NASDAQ: AMZN ); this is a stock, if you look at the weekly chart, it’s made a heck of a really, really deep cup and handle that goes back over a few years here. Here’s the left side of the cup and then a big steep pullback. And then a climb back up, to where ultimately the stock pushed up to a new high back here early in 2024, just last year.
This began the part of the handle, and this is a really sloppy pattern, but the dynamics are the same. That’s the thing, it doesn’t have to conform perfectly to what somebody would draw in a book or on a chart. It just has to show you the pullback, the climb back, the test of prior resistance after the climb back, and then ultimately some consolidation at a much higher level than this last area here, and then finally a breakout.
We got the breakout here at about $200.00. At Stock Market Mentor we’ve been trading this, I’ve been holding this for a while. We got a breakout above 200.00, now it’s at 233.00. We look at the daily chart, this is a buy. We look at this, I want to own this stock. Now, how do we do it? Now, we look at the daily chart and we see, the red line here, the 50-day moving average, it’s trending higher, out of this touch and go here, which is a pattern that I really, really like.
When these two touch close together and the stock starts moving higher, this is the best time to buy a stock, essentially right out of here. So we got the stock, and it rebounds across the 50-day moving average multiple times 1, 2, 3, 4, 5, now 6 as of Friday. I had looked to be adding this stock on Friday but decided not to because it was coming down to approximate the 50-day moving average.
This doesn’t mean that there was any sign at all that the 50-day would hold; it was just an indication that, well maybe it will, maybe it won’t. It was too early to make a commitment here. So I decided, okay, I’ll wait until Monday. Bam, lo and behold, the stock gaps up slightly and is now up even higher. So now, I look at this as a successful test. These are some of the lines that I’ve drawn per se, as we’ve gone through this.
You can see as long as a stock, in my view anyway, holds at a key moving average like this, and shows you the kind of setup that typically works, this is a time when you have to buy. If you’re committed to Amazon ( NASDAQ: AMZN ), this is your opportunity to buy. So what have we missed by waiting? Well what, a point, a point and a half, something like that.
So what my suggestion is, I’ll tell you, I’ll tell you just what I told our members. You take an entry right around here, 233.20, basically right where we got it. I’ve got a stop at 228.05, that’s just below Friday’s intraday low. The reason I’m keeping it so tight here is because the only reason I wanted to buy the stock today was because I thought that this pullback on Friday marked the end of a pullback and then the start of a next move higher.
I really think that Amazon ( NASDAQ: AMZN ) is firing on all cylinders. That doesn’t mean it’s going at the speed of sound because it’s absolutely not. But it’s trading in a really nice pattern here that makes it a pretty easy stock to hold, and actually a pretty easy stock to trade around too.
Free Chart