📦 Weekly Deep Dive: Amazon (AMZN)
Why This Tech Titan Just Hit My Radar Again
Hey traders and investors,
I’m back with another Weekly Deep Dive, and this time I’m zooming in on Amazon ($AMZN). After everything that’s gone down in the markets lately—volatility, tariffs, and a ton of conflicting signals—I wanted to break down one of the most widely watched stocks out there and show you what’s really happening under the hood.
Amazon has been on a wild ride. We're talking about a company that dropped over 50% in 2022, only to claw its way back and deliver a 145% gain from early 2023 to recent highs. And now? It's off about 10% YTD. So is this just a breather, or is something bigger going on?
Let’s talk about what the market is telling us—and more importantly, how to trade it. I’ll walk you through the technical setup, explain it like we’re just sitting down at a desk together, and point out exactly where I’d be looking to enter and exit based on what the chart is showing me.
🧠 The Backstory: AMZN Isn’t Just an E-Commerce Play Anymore
A lot of people still think of Amazon as "just" a retail giant, but that’s not really where the money is anymore. AWS (Amazon Web Services) has been the growth engine, with a 24% annual growth rate over the past few years. That's a monster number for a segment that already brings in billions.
They’re also making big plays in digital advertising and AI, and that’s what has helped the valuation balloon. In fact, the Price-to-Sales ratio has doubled since 2022—up from 1.7x to 3.4x. That’s not a small jump. But the question is… how much of that optimism is already baked in?
Now let’s get into the real meat of this—the chart. That’s where things get a whole lot more interesting.
🔍 Chart Breakdown – Friday Close: $184.87 (+2.01%)
Alright, let’s really zoom in on what this chart is showing us and break it down piece by piece. If you’re newer to reading charts or just want a refresher, this is for you.
📉 Overall Trend: Bearish
Look up at the top of the chart—it says 1M: Bearish and 6M: Bearish. That just means that over the past month and six months, Amazon has been moving down overall. You can see that clearly by how the price keeps making lower highs and lower lows.
When the trend is bearish, you're generally better off selling rallies rather than buying dips—unless you have a really good reason or see signs of reversal.
📊 Moving Averages: Still Acting as a Ceiling
Let’s talk about those colored lines snaking across the chart:
The red line is the 50-day moving average
The blue line is the 200-day moving average
These lines are used to show the average price over a given period. Right now, the stock is trading below both, and you’ll notice how it tried to get close to the 50-day but couldn’t break through.
👉 That’s bearish. In a strong stock, you’d expect the price to stay above those lines or bounce off them. Here, they’re acting more like a ceiling, capping the price.
📦 Support and Resistance Levels
This part is key for planning your trades.
Support at $151.61
This is the lowest price AMZN hit recently and where buyers stepped in last time. If the stock pulls back again, this level might hold—but if it breaks, things could fall fast.Resistance at $196.61 and $203.61
These are past highs the stock couldn’t get above. Every time price tried to push higher near those areas, it was rejected. So if AMZN gets back up there, expect some friction.
Think of support as the “floor” and resistance as the “ceiling.” And right now, we’re kind of stuck between floors—bouncing off $165-ish but not strong enough to bust through $196.
💰 Volume: The Fuel Behind the Moves
Check out the gray bars under the candles—those are volume bars. They show how many shares are trading. Notice how volume spiked on the recent bounce? That’s good. It means buyers were active.
But what we haven’t seen is follow-through—like a big green day that pushes price up past key levels with sustained volume. That’s what we’d want to confirm a real reversal.
📈 Relative Strength Index (RSI): Neutral Zone
The black-and-green wavy line in the middle of the chart is the RSI, which tells us if a stock is overbought or oversold.
Above 70? That’s overbought (maybe due for a pullback).
Below 30? That’s oversold (maybe due for a bounce).
Right now, RSI is climbing but still around neutral levels. That tells us the bounce we’re seeing isn’t extreme—it could go either way.
💣 IV Rank: 72
Implied Volatility Rank is really important if you trade options. This number shows us how expensive or cheap options are compared to their own history.
High IV Rank (like 72) means options are pricey. This is good for sellers—you’re collecting more premium.
It also means the market is expecting bigger moves in the near future.
So if you’re thinking about selling a cash-secured put or a credit spread, this is the kind of setup you want.
🧭 Trend Strength: 7/10
This is an overall technical score that says the trend is still strong—but not in a good way. It’s trending downward. So even though the stock bounced on Friday, the bigger picture is still tilted bearish unless something changes fast.
🛠️ So, What Do We Do With This?
Here’s how I’d play it depending on your style:
📉 If You’re a Trader:
This isn’t the place to jump in blind. The chart is telling us “not yet.”
Wait for confirmation—either:
A break and close above $196 with strong volume to flip the trend bullish short-term, OR
A pullback rejection near $196, which sets up a nice bear call spread or short-term fade trade
Keep your stop tight if you go long—this chart can turn quickly, especially with all the tariff headlines flying around.
💼 If You’re an Investor:
You’re not in a rush. This is one of those “let it come to you” situations.
A pullback to $165–170? That’s where I’d start building a long-term position.
Or sell a cash-secured put at $165 if you want to get paid to wait.
Just keep in mind that we’ve got earnings on May 6, so things might get bumpy as we head into that report.
🧾 My Take
Amazon’s been on a huge run the past year and a half. Technically, it’s not in a great spot yet—still under resistance, still in a bearish trend—but it’s not breaking down either.
If you're a trader, you’re waiting for that next move—either a break over $196 to ride the upside, or another rejection to fade it.
If you’re an investor? You’ve got time. Let it come to you. The market’s handing out second chances lately. Don’t chase—position yourself with purpose.
Let me know what you think—would you trade $AMZN here, or are you waiting for a better setup?– EC📬
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*Disclaimer: The examples in The Options Oracle are my opinion, not financial advice.