Amazon.com: 3-Day Rule in Effect?
The "3-day rule" is a basic principle that suggests traders should wait for the third day after a drop to consider entering a stock. That concept may now apply to e-commerce giant Amazon.com.
The first pattern on today’s chart is the gap lower on Thursday, one session after the Federal Reserve hammered sentiment with its "higher for longer" message. Notice how AMZN has managed to hold its ground since, despite the broader market edging lower.
Second, the stock is trying to stabilize near the bottom of the Keltner Channel and the 100-day simple moving average (SMA).
Next, stochastics have dipped to an oversold condition.
Finally, consider the price action around $128. AMZN peaked there in early June. It broke out (on above-average volume) in the second half of the month and bounced there in July and early August. Friday’s low was $0.52 above that level, which could mean support is holding.
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart is the gap lower on Thursday, one session after the Federal Reserve hammered sentiment with its "higher for longer" message. Notice how AMZN has managed to hold its ground since, despite the broader market edging lower.
Second, the stock is trying to stabilize near the bottom of the Keltner Channel and the 100-day simple moving average (SMA).
Next, stochastics have dipped to an oversold condition.
Finally, consider the price action around $128. AMZN peaked there in early June. It broke out (on above-average volume) in the second half of the month and bounced there in July and early August. Friday’s low was $0.52 above that level, which could mean support is holding.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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