Amazon Stock Forecast: Are AMZN shares headed back to $3,176?

  • AMZN was recently rejected at an earlier resistance level at $3,762.
  • This gives the Amazon chart a clear double-top formation.
  • There is little clear support until $3,450.

Amazon (AMZN) investors must be at least somewhat anxious after shares put in a nearly perfect second leg of a double top formation on Friday, November 19. AMZN shares immediately bounced lower after hitting $3,762. Shares closed down sharply that session, and dropped off precipitously on Monday. Tuesday and Wednesday then offered up matching doji candles before the Thanksgiving weekend commenced.

Besides the AMZN double top, shares seem uncertain against the coming Black Friday sales, which announce the start of the US Christmas shopping season. This season is typically when Amazon does its best. If Amazon stock does not see a quick rebound next week, the result may be a fallback to support at $3,176.

Amazon Stock News: 'Tis the retail season

Amazon is currently preparing for Cyber Monday, which now starts on Saturday. Go figure. However, one of the heaviest shopping weekends of the year is taking place as a group of workers and activists is staging a protest called Make Amazon Pay on Black Friday. The group published a list of 25 demands that include higher wages, more sick leave, making Amazon pay more taxes and forcing the e-commerce giant to reduce its carbon footprint.

On Tuesday, Amazon said goodbye to a 14-year veteran of the C-suite. Cameron Janes, who most recently ran the physical store unit, made the decision to leave. On the same day, Amazon Web Services (AWS) announced a deal with Compagnie Financière Richemont, a major Swiss luxury retailer.

In a press release, the cloud king said, "Richemont will close its European data centers and migrate additional data centers in Hong Kong and the US to AWS by the end of 2022. As part of its digital transformation strategy, the company will move more than 5,000 virtual machines and 120 SAP instances to AWS to modernize its infrastructure, raise its security posture, and drive automation across its global operations."

Also, Amazon Music said it was exclusively releasing a new version of Taylor Swift's "Christmas Tree Farm". 

Amazon Stock Forecast: Time for a pullback

AMZN stock's immediate rejection at $3,762 leads us to believe that this was a true double bottom. If so, Amazon shares should pullback in the next few weeks. 

$3,450 is one level that has served as both support and resistance in recent times. The more likely target for bears though is all the way down at $3,176. AMZN bounced off this support floor on three separate occastions – June 7, August 20 and October 4. One reason to believe this is that the long green and red daily candles on November 18 and November 22 are perfect mirrors, and thus the rejection seems real.

The Relative Strength Index (RSI) never even reached 70 on the recent swing high. This signifies that bulls are none too hungry at the moment. The current reading has flatlined at 57. Expect this to fall below 50 next week as protests scare away potential buyers, who will wait for a better entry point.

AMZN 1-day chart

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