Why Amazon.com, Inc. (AMZN)’s Rally Could Not Last Longer?

Amazon.com, Inc. (NASDAQ:AMZN)’s recent high low rally might have surprised investors by falling short of the $347 mark but Carolyn Boroden  of TheStreet  explained the existence of projected resistance right around the $349.02 mark. This makes the Amazon.com, Inc. (NASDAQ:AMZN) stock vulnerable to dip again if it can’t break through this point.

There are two types of analysis that Boroden used with regards to Amazon.com, Inc. (NASDAQ:AMZN)’s recent highs and lows ride. Both of them told the same story, that is, the rally is about to reach its end.

Firstly she used the price analysis. Here she took the high and low points from the prior rally and projected them a 100% to the most recent low. By doing this, a resistance at $349,02 for the Amazon.com, Inc. (NASDAQ:AMZN) stock could be clearly seen. Boroden also showed how this value overlapped with the 7,8,6 retracement of the prior hi-low swing.

This hurdle area was critical for Amazon.com, Inc. (NASDAQ:AMZN) to cross, if the stock had any hope of continuing its rally. As Boroden pointed out, Amazon.com, Inc. (NASDAQ:AMZN), although neared this mark, but was still significantly shy of hitting it.

The second analysis, which tells the exact same story in terms of last few remaining breaths in rally is the timing analysis. The use of time parameters, instead of price, didn’t even complicate the story before revealing that the stock was about to dip. In this analysis, Boroden essentially just look at the time duration of the prior rallies. In the case of Amazon.com, Inc. (NASDAQ:AMZN), this time was 23 days for the rally under discussion and the time duration of the rally before this one was also 23 days. Another prior high low ride clocked 22 days. Hence, it is not too much of a stretch on an analyst’s imagination to see that this rally too would last about the same time.

Thus, the combination of the two analysis would have given investors a heads up pertaining to Amazon.com, Inc. (NASDAQ:AMZN)’s dip.

Disclosure: none