See what I did in the title (classic lol)……. Amazon has been going pretty much straight north since November 2009 so why would I be looking at a chart thinking a good short opportunity could come up?  Well there are a couple of reasons that I will talk about.  This doesn’t mean the uptrend is over, far from it, I just happen to see an area that I think will be filled before much more of a run up.

Gaps are awesome!

The teal box represents the gap between $987 – $1,049.  As we have seen from this article I linked previously about gaps being filled: https://bioequity.org/2013/11/13/statistics-do-stock-price-gaps-always-get-filled/ they get filled around 90% of the time.  The magenta line is where I would wait for price to close below so you would be able to see that the current short term uptrend is broken.

Fib Extension resistance is also here

Price has gotten close to a long term fib extension near $1,228.30 and is also waffling around the 161.8% fib extension from the pivot points I highlighted in white.

Here price has hit against the 423% fib extension level from another set of live pivot points.  So as you can see there are fib extension resistance levels that are impacting the current move up.

Final Considerations

Shorting a stock that has been in an almost constant uptrend for the past 8 years is always an interesting call.  I think that with the fib extension resistance levels and the main factor being the gap that has developed create a very interesting opportunity for a quick short trade.  The exit would be at $1,000 which is a little north of the bottom of the gap but why be greedy.  The safer entry would be when price closes below the magenta line that I have drawn on my charts but you could enter now.  Normally I don’t use stop losses but if I did take this trade then my stop loss would be at $1,238.