Amazon.com, Inc. (AMZN) shares have soared nearly 60% since the beginning of the year, and many analysts are bullish on the stock moving into 2018. Goldman Sachs recently reiterated its Buy rating and raised its price target to $1,450.00, while other analysts are encouraging Amazon to reach further into non-ecommerce markets. For instance, Cowen & Co. analysts recommended that Amazon buy Rite Aid Corporation (RAD) to accelerate its move into the pharmacy business.

At the same time, Amazon continues to post impressive financial results. Third quarter revenue rose 33.7% to $43.74 billion – beating consensus estimates by $1.6 billion – and net income of 52 cents per share beat consensus estimates by 49 cents per share. Strong holiday sales during "Cyber Week" could further bolster Amazon's financial results in the fourth quarter and ultimately improve its prospects moving into next year. (For more, see: Amazon Should Buy Rite Aid: Cowen.)

Technical chart showing the performance of Amazon.com, Inc. (AMZN) stock

From a technical standpoint, the stock appears to have reached significantly overbought conditions. The relative strength index (RSI) remains firmly in overbought territory at 77.53, and the moving average convergence divergence (MACD) has lost its momentum dating back to late October. The latest candlestick chart also shows a possible bearish engulfing that could suggest an end to the stock's recent rally – at least in the near term.

Traders should watch for Amazon stock to retest R1 support at $1,168.59 over the near term. A breakdown from these levels could lead to a move back to reaction highs at around $1,080.00. If the stock continues its rally, traders should watch for resistance at the R2 level of $1,231.90. A breakout from these levels could lead the stock to make new all-time highs, although overbought conditions would be further exacerbated. (See also: Amazon Hits Record, Bezos Net Worth Tops $100B.)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.