05/01/2020 – 9:27 PM
https://www.barrons.com/articles/amazon-coms-valuation-deserves-a-haircut-says-one-analyst-51588381541

“I believe that AMZN, based on trailing 12-month earnings per share, doesn’t deserve to trade at more than 30 times earnings, so the shares could fall by 60% before it reaches fair value.” – Thomas H. Kee Jr.

I forgot the chart …

Short term I see two possible scenarios.

If this bear flag does play out, we could go down to 2840/30, followed by a small upward reaction, then (the best case for shorts) target the 2740 level by the end of the week / early next week. If we do hit 2740 though, I expect the Fed to step in and bring the price back in the 2850 range (so I don’t think we’d go lower than 2740).

If the bear flag doesn’t play out, then we could have another run at the 2940/50 level.

What I want to point out is that we are still in a BULL trend and until now it took 2 or 3 attempts to break decent resistance level. On the chart I have attached I marked with blue the attempts to break 2730, then with red the attempts to break 2870. Following this pattern, if we break 2940 (for which we have already had a failed break-out), we’d most likely remain over 2940. That’s the most important level of resistance/ support dating back to October 2018.

Edit at 6:00 pm. We’re at the 2870 level, which I mentioned as a strong support level. Here’s where I think the trend will be decided for the next few days, at least. Break bellow, opens the door to 2840 and 2740, while a rejection opens the door for a retest of 2940.

Is that a higher divergence in your pocket, or are you just happy to Randy me!!

Way to early to gloat, but we have been getting our butts kicked and it is nice to have a small win.

Can’t argue with results, good call. Whats going to happen tomorrow? Price Targets?

While anything is possible, the most typical (bearish) scenario would be an initially slow-roll, with the market, key sectors, & the market-leading stocks breaking those key uptrend lines, which would probably be followed by a relatively swift & impulsive initial drop, followed by the usual wave of dip-buyers stepping in. From there some back & forth with the correction building momentum & accelerating if & as each of the initial targets on SPY are taken out.
Again, many possibilities including the market not breaking down (or breaking those TL’s followed by another leg higher) but that would be the most likely scenario IMO.

Can easily fall, OR rise, 20pts in a shot. 100pts has been done in recent history, and the breakdown should shock quite a few folks so that wouldn’t be surprising for those looking for it