Is Amazon (AMZN Stock) set to decline further?

Amazon Inc. (NASDAQ: AMZN) traded lower on Tuesday, after it hit resistance at 3164, slightly below the prior upside support line drawn from the low of September 21^st. Currently, the stock is trading, not only below that line, but also below a short-term downside one, taken from the peak of February 2^nd. In our view, this keeps the short-term outlook somewhat negative.

That said, in order to get confident on larger declines, we would like to see a dip below Friday’s low of 3038. This will confirm a forthcoming lower low on both the daily and 4-hour charts and may initially pave the way towards the low of November 2^nd, at 2950. If that barrier doesn’t hold, then we may experience extensions towards the 2875 territory, marked by the low of September 21^st.

Taking a look at our short-term oscillators, we see that the RSI, already below 50, has turned down again, while the MACD, although above its trigger line, lies within its negative territory and shows signs that it could top soon as well. Both indicators suggest that the stock may start gaining more downside speed soon, which enhances the case for further declines.

In order to start examining the bullish case again, we would like to see a strong rebound above 3337. The price would already be well above both the aforementioned diagonal lines and investors may get encouraged to target the peak of February 2^nd, at 3425. Another break, above 3425, could see scope for more advances, perhaps towards the 3495 hurdle, defined as a resistance by the high of October 12^th.