Amazon.com, Inc. (AMZN) was one of the top performing momentum stocks in the first half of 2018. The stock closed Monday up 46.5% year to date after setting its all-time intraday high of $1,763.10 on June 21. Amazon shares closed Monday, July 2, at $1,713.78 up 46.5% year to date and up a bull market 35.4% since the Feb. 9 low of $1,265.93.
When you look at the daily chart for Amazon below, you will observe the volatile ride within stock's solid first half performance. The stock traded as high as $1,498.00 on Feb. 2 and then dipped a quick 15.5% in a correction to a low of $1,265.93 on Feb. 9. The stock then began a momentum run-up of 27.8% to its March 13 high of $1,617.54. Volatility in the longer-term uptrend continued as the stock slumped 16.4% to a secondary low of $1,352.88 on April 4. From this low, a bull market gain of 30.3% reached its all-time intraday high of $1,763.10 set on June 21. This volatility was successfully traded using the monthly, quarterly, semiannual and annual levels from my proprietary analytics in the first half of 2018. (See also: Amazon Prime Day 2018: Whole Foods, 36 Hours, More Countries.)
The daily chart for Amazon
The daily chart for Amazon shows my weekly risky level of $1,739.98 as the upper horizontal line. The second two horizontal lines are my quarterly and semiannual value levels at $1,599.82 and $1,546.97, respectively. The stock is well above its 50-day and 200-day simple moving averages of $1,631.44 and $1,352.25, respectively. At the bottom of the chart is my annual value level at $993.88. Not shown above the chart is my monthly risky level of $1,861.89.
The weekly chart for Amazon
The weekly chart for Amazon is positive but overbought, with the stock above its five-week modified moving average of $1,661.61. The stock is well above its 200-week simple moving average of $791.33, which is also the "reversion to the mean." The 12 x 3 x 3 weekly slow stochastic reading ended last week at 90.11, above the overbought threshold of 80.00 and just above 90.00 as an "inflating parabolic bubble."
Investors should buy Amazon shares on weakness to my quarterly and semiannual value levels of $1,599.82 and $1,546.97, respectively, and reduce holdings on strength to my weekly and monthly risky levels of $1,739.98 and $1,861.89, respectively. (For more, see: Amazon Invites Startups to Help It Deliver.)