Amazon has been in a freefall over the last month. Down nearly 200 points, it has found support at a key technical level the past three days. That level is the ever so important 200-day SMA on the daily chart. Generally viewed as the long term indicator for a stock, it can trigger strong buying or selling once a stock crosses over this level. That is why AMZN h as found support at this level in this bearish market. Because if it closes below the 200-day SMA, it could trigger even more aggressive selling/liquidation. In turn, that can cause AMZN to have an accelerated drop from recent lows. All in all, not too many people want to see AMZN continue lower. Now that support and the floor have been verified, it is important to see AMZN deflect away from this technical level. The more pressure sellers put on buyers here, the more likely we can see the stock swing lower. Yes, Jeff Bezos cashed in on $2.8B in stocks, but it is a small sliver to the normal daily volume. This is more a product of a weaker than expected earnings report. Eventually, investors will continue to flood back into the stock, but it seems the bears are trying to take full control. AMZN needs to hold the 200-day SMA at $1750 in the near term, otherwise, expect the drop to $1700-$1650 to happen very quickly.
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