Amazon stock hits trend line - Stock to Watch

CMC Markets

The current sell off in the US technology sector remains a key to near term sentiment in world equity markets.

Looked at in traditional price: earnings terms, valuations for some leading stocks remain very high. Prices are all about momentum and anticipation that future earnings growth will be very strong. This makes it more than usually difficult to judge where some of these stocks may eventually form a base.

Given this background, the Amazon stock chart looks interesting. On Friday, it came to rest at the first of 2 long term trend lines. A clear break below this line might indicate there is more selling to come. With the market finishing last week on the low of a large, red candle this looms as as distinct possibility.

As usual though it pays to keep an open mind as a trader. Any signs of basing behaviour around this support level might provide investors with some comfort ( at least for a counter trend corrective rally).

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