1. Bullish symmetrical triangle pattern on the weekly chart, which indicates a continuation of the previous trend (uptrend). 2. Price has been consolidating for (5) months. With momentum shifting to the upside, when the squeeze is lifted (red dots turn to green), the move will be explosive. I reason the move will be to the upside. A strong positive earnings report this week may provide the catalyst for the move. 3. If price breaks outside of the triangle to the upside with strong volume, then I anticipate a retest of resistance at 3.5K. 4. RSI is at 54, which leaves room for future momentum to the upside.
Bearish Factors:
1. AMZN may move to the downside with support at 3100K, if the overall market turns down this week. The remaining levels of support are listed at the %38, %50, and %61.
Strategy:
1. Consider the OTM 3500C (19 Feb) with a focus on a retest of resistance. Be careful, AMZN releases earnings on 02 Feb, which may negatively affect the IV of the option contracts.
Happy Trading!
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