Don't Ignore This Chart!

Amazon To Cut Prices At Whole Foods, Prints Hammer On Support

 | 

It was another round of selling for Whole Food Markets' (WFM) competitors as Amazon.com (AMZN) made headlines by announcing that prices would be cut at WFM stores.  That spooked the likes of Costco (COST), Wal-Mart (WMT) and Target (TGT) as all three saw drops on very heavy volume.  Meanwhile, AMZN's own price slump may have ended on Thursday as a bullish hammer printed at price support.  Check it out:


If the price support reflected above fails to hold, be very careful.  The weekly chart on AMZN shows slowing momentum in the form of a negative divergence and AMZN is currently resting just beneath its 20 week EMA support.  So loss of price support above would also represent the loss of rising 20 week EMA support - a double technical negative.  Here's the weekly chart:

 A close below 950 could accelerate the selling and it's certainly conceivable that AMZN could trade over the next few weeks as low as 850 - to test the 50 week SMA and reset the weekly MACD at or near centerline support (pink arrows).  So while the news out of AMZN may be shocking some of its competitors, AMZN has its own technical issues to be concerned about.

Happy trading!

Tom


 

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus