The AMZN active short trade recently hit the first target for a 13% gain and has bounced in-line with the broad market since they both simultaneously hit their key support/targets a couple of weeks ago. Like most shorts at or near a profit target when the QQQ hit T3 and AAPL hit T1, I covered AMZN at that time but I have just re-entered the position here as AMZN is once again offering a very objective short entry at current levels with the appropriate stops not too far above. The blue line on this chart represents not only horizontal resistance, including the 2011 peak highs but it also marks the 61.8% fibonacci retracement of the recent move down from the peak high made back on Sept 14th. Typically the 61.8% retracement level is the highest retracement seen if the move just proves to be a counter-trend bounce within a large trend. Therefore, I do not plan to add to this short position if AMZN surmounts that level and I will adhere to my stop parameters, possibly even stopping out sooner depending on the action in the broad markets.
As my preferred target this time around is at least T2, I am going to use a somewhat liberal stop just north of the 256 level although a tighter stop could also be set above the 251 area which would still provide a very generous R/R of 4.5:1 for those only targeting another dip back to the recent lows at 218 (which is also horizontal support and would be my first target at this point). Charts on this trade in order as posted with the updated daily chart third. I also included the weekly chart (last) with my preferred longer-term swing targets. I might hold out for the top of that weekly T1 zone (161) on this current trade if the broad market plays out as expected.
