AMZN posted a Golden Cross formation on 1D (MA50 crosses over the MA200) yesterday following an impressive EPS. Technically this is a heavy bullish signal.
It is productive to look at how this pattern traded in the past. Since the 2008 Sub-prime mortgage crisis this pattern has been printed another 5 times:
* In 2016 it emerged shortly after a Death Cross (the opposite formation) and after an initial 4 day pull back it gaped up aggressively.
* In 2015 it emerged shortly after (around 20 days) a gap up and after an initial pull back and consolidation it gaped up again aggressively.
* In 2012 it emerged again shortly after (around 20 days) a gap up and after an initial pull back and consolidation it rose aggressively. Note that the candle action is quite similar to the 2019 setting in duration and formation (Death Cross followed by Golden Cross).
* In 2010 it emerged after a strong bullish run, consolidated and continued higher on a steady Channel Up.
* In 2009 it emerged after the 2008 crisis bottom was formed (a little over 4 months), and continued higher on a steady Channel Up. Note that the candle action is quite similar to the 2019 and 2012 settings in duration and formation (Death Cross followed by Golden Cross).
As you see in all cases AMAZON rose significantly after the occurrence of the Golden cross. In 3 out of the 5 cases the price even pulled back on the very first few days, so if that happens again it shouldn't mislead investors. Also in all cases the formation occurred after a Death Cross, with 2015 being the longest, 2016 the shortest and 2012, 2009 very similar to the current (2019) candle sequence.
Taking into account all the above, we are remain bullish on AMZN targeting initially 2,040 and 2,300 in extension.
@InvestingScope Buddy cool strategy. I think everything will work out. I will follow you, interesting how it will end
InvestingScope
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@IgorPorokh, Thank you Igor. We are only following what the historic volatility suggests. And since 2009 it shows that the Golden Cross on AMZN is a strong buy.