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Hello traders! Updating and tracking Amazon forecasts are already here. I shared this on May 26 “Amazon analysis and technical forecasting”Post to my blog. In this post, we summarize this configuration and see how it has developed now. If you would like more information about our way of trading and the technical analysis we use, please see Traders Academy Club. Spoiler alert: There are free subscriptions.
In the H4 chart we have a bearish divergence that has formed between the first maximum that has formed at 3431.55 and the second maximum that has formed at 3552.20 according to the MACD indicator. The price fell and fell below the last low, to 3300.92, thus forming a classic bearish divergence configuration followed by bearish convergence, we can consider it as a bearish pressure test. Depending on the book’s scenario after a bearish convergence, we can expect corrections and then a lower continuation. Currently it looks like a correction is taking place and until the strong resistance zone (marked in red) shown in the following image keeps my short term vision stay bearish here and I hope the price goes down even further.
Amazon H4 Graphic (4 hours) Current scenario
In the H4 chart, my view was bearish and I expected the price to go down even further until the strong resistance zone is maintained. Price action did not follow my analysis here and this idea failed as the price went up and broke above the strong resistance zone and currently stays above. I see this as a contradictory sign that opposes the bearish view. So the bearish view has been invalidated here, my current view on Amazon is neutral.
So traders, that’s why I wanted to show you this example to help you understand why we should always trade based on the facts and suggestions provided by the market and take the right actions accordingly. Although we had data here that supported the bearish view, the price did not stay below the strong resistance zone, the price rose and provided a valid break above the strong resistance zone and is currently keeps on, which I see as a contradictory sign. You should always keep in mind that losses are part of the trade. We cannot expect every operation to follow our plan and provide us with benefits. In trading, we cannot avoid losses, but to be successful in trading, we should know how to reduce losses before and how to manage trading when the price is going in the opposite direction. When you see conflicting signs like this that run counter to our point of view, it is always advisable to reduce losses sooner and get out of the trade.
Note: Here you can see my webinar on how to reduce losses early
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