As $AMZN has recently ripped to new all-time highs after a post earnings explosion, it is worth a closer look on multiple time frames to see if the move is sustainable.  Let’s begin with the monthly chart:

I have posted this chart many times over the past few months, noting how significant a break above the 94 level might be (thick dashed line).  This level represented downtrend resistance stretching back to late 1999.  These type of multi-year breaks can be explosive, and obviously was the case for $AMZN, moving on to take out its previous all-time high at 113 and run all the way to the recent high of 134.56.

Note that RSI, while very elevated, still has plenty of room to move up, particularly when compared to other strong runs in ’03 and ’07.  Additionally, we see a strong bull cross on the PPO, which has only occurred a few times in the life of the stock.

Let’s zoom into the weekly chart:

Here we see the key break above long-standing 94 resistance and the huge move above the six month ascending channel on earnings.  Note the technical similarities to the strong move in ’07, as RSI remained very high for many months while price continued to move up.

Currently, however, price is significantly extended above its closest major moving average – the 10weekSMA, currently at 108.94.  As in ’07, AMZN may consolidate in this range as the MA’s ‘catch-up’, and then bounce once more in a new leg up.  A major dip to the 10weekSMA on strong volume, or a loss of that MA, would be reason for obvious concern.

Finally, let’s look at the daily chart:

Here we see the gap on huge volume after earnings, and the subsequent bull flag that broke higher on a bounce from the 10daySMA.  Similar to the weekly chart, RSI is in extreme territory, but can remain that way for a protracted time frame.  Additionally, with this type of momentum, even the imminent bear MACD cross can be overcome through consolidation, and does not necessarily indicate lower prices in the near-term.  In this time frame, focus should be placed on the 10daySMA, currently at 127.70 as well as the peak of the bull flag at approximately 125-ish.

In summary, $AMZN has exhibited technical characteristics similar to its other major multi-year breakout in 2007, and while indicators are signaling ‘overbought’ conditions, price remains stable and above all key moving averages.  Watching the 10weekSMA and the 10daySMA is an easy way to determine if any weakness becomes more noteworthy – and unless those levels are convincingly violated, the trend clearly remains bullish.

Happy Charting and Trading,

@theEquilibrium