Amazon.com, Inc. stock (AMZN) reached another new record high yesterday, as it extended its gains above $1,500 mark. The stock continues to trade well above its end of year closing price of $1,167.5. AMZN bounced off its upward trend line a month ago following downward correction below the price of $1,300. We can see some negative technical divergences along with overbought conditions, but the stock is still remarkably stronger than the broad stock market:
Dow Jones Struggles at 25,000 Mark
The Dow Jones Industrial Average daily chart shows that blue-chip index reversed its three-week-long rally from February 9 low. The market broke above the resistance level of around 25,500 over two weeks ago, but it failed to continue higher. We saw potential negative candlestick pattern called Dark Cloud Cover. It is a pattern in which the uptrend continues with a long white body, and the next day it reverses following higher open and closes below the mid-point between open and close prices of the previous day. This negative downward reversal pattern has been confirmed. Consequently, the index broke below 25,000 mark. Since then, it was retracing some of this decline, but it remained relatively weaker than the broad stock market last week. Will it break above 25,000 mark again? It currently trades just below that resistance level:
Concluding, the S&P 500 index closed virtually flat on Wednesday, after opening 0.7% lower in reaction to Gary Cohn's resignation news. The market was overall bullish yesterday, despite remaining within its short-term consolidation. Is this just a flat correction of Friday-Monday's move up? It looks so. However, we may see some more uncertainty ahead of tomorrow's monthly jobs data release.
The broad stock market was falling almost 12% off its late January record high on February 9 before an intraday reversal. It was a final panic selling ahead of short-term upward reversal, and the market found a support of its medium-term upward trend line, which was at 2,550. The S&P 500 index retraced its whole month-long January rally and fell the lowest since early October. Then it retraced more than 61.8% of this relatively quick and deep sell-off. So, medium-term picture is now neutral. Investors took profits off the table following the unprecedented month-long rally, but then they began selling in panic. It was quite similar to 2010 Flash Crash event. This sell-off set the negative tone for weeks or months to come, despite recent broad stock market rebound.