Stock Of The Day: Can Prime Day Propel Amazon To New Heights?
Amazon.com, Inc. (AMZN) is highlighted as the Stock of the Day, with shares testing a key resistance level around $224. Despite positive news from Prime Day, the stock remains stable. If this resistance is broken, it could signal a significant upward movement, as previous sellers may have exited the market, allowing new buyers to push prices higher. The stock's recent trading range shows support at $217.50, which was previously a resistance level. A breakout above $224 could indicate a new uptrend for Amazon shares.
Despite the attention and positive news from Amazon.com, Inc. AMZN regarding Prime Day, the stock’s shares are little changed on Friday. But that may not be the case for long.
The shares are testing the top of their recent trading range. We have selected Amazon as our Stock of the Day because if the top of this range is broken, a large move higher may follow.
You can see on the chart that levels around $217.50 were support for Amazon back in December and January. When the stock rallied, the buyers were happy.
But in February, the support broke and the price fell below it. When this happened, some of the people who bought regretted their decisions to do so. Many vowed to hold onto their losing positions, but they also decided that if they could eventually do so, they would sell at a breakeven point.
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As a result, when the stock finally rallied back to this level in June, they placed sell orders. This large concentration of sellers caused resistance to form at the same price that had previously been support.
In late June, the buyers finally overpowered these sellers, and the resistance was broken.
When this happened, some of those who had sold decided that their decision to do so was a mistake. Some of them vowed to buy their shares back if they could eventually acquire them at the same price they had sold them for.
The large number of these remorseful sellers placing buy orders at the level that had been resistance turned it into a support level. This is the bottom of the recent range.
The top of the range has been around $224, and it’s currently being tested. There are a large number of sellers around this price. If this resistance is broken, it will be a sign that the sellers are gone. They have finished or canceled their orders.
With this large supply of stock out of the market, new buyers may have to push the price higher to acquire shares. This could form a new uptrend.
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