:max_bytes(150000):strip_icc()/AMZNChart-54a5491b6b0f46eab3fc13c03e69b250.gif "Watch These Amazon Price Levels as Stock Reaches $2 Trillion Market Cap")
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Key Takeaways
- Amazon shares will remain in focus after the e-commerce and logistics behemoth crossed the $2 trillion market capitalization mark on Wednesday.
- Amazon shares have broken out above a rectangle pattern to a new all-time high, suggesting a continuation of the longer-term uptrend.
- The measuring principle, which calculates the stock’s most recent leg higher in points and adds that amount to the rectangle’s breakout point, projects a price target of $260.
- The $188 breakout level will remain a significant technical area during future retracements as it has flipped from a major region of resistance over the past three years into a new area of support.
Amazon (AMZN) shares will remain in focus after the e-commerce and logistics behemoth crossed the $2 trillion market capitalization mark on Wednesday, making it the fifth U.S. company to achieve the milestone. Amazon joins an exclusive group of other big tech giants including Alphabet (GOOGL), Apple (AAPL), Microsoft (MSFT), and artificial intelligence (AI) darling Nvidia (NVDA).
Below, we take a closer look at Amazon’s chart and use technical analysis to point out important levels to watch out for after the stock’s move to a new record close.
Breakout From Rectangle Pattern
Since carving out a chart formation that closely resembles an inverse head and shoulders pattern between June 2022 and October 2023, Amazon shares have continued to trend mostly higher. Moreover, the 50-week moving average (MA) crossed up above the 200-week MA in late March to create a bullish golden cross, a pattern that often signals the start of a new uptrend.
In addition, the relative strength index (RSI) sits just below the overbought 70 threshold, indicating upward momentum.
More recently, the e-commerce giant’s price has broken out above a rectangle pattern to a new all-time high (ATH), suggesting a continuation of the longer-term uptrend. However, investors should monitor for an increase in trading volume in upcoming trading sessions to confirm the breakout.
Monitor These Levels Following Move to Record High
Given the stock has entered blue sky territory with no prior chart action to reference, investors can use the measuring principle to forecast a price target for gauging where the shares may be headed next if they continue their move higher.
To do this, we calculate the stock’s most recent leg higher in points and add that amount to the rectangle’s breakout point. For instance, we add $72 to $188, giving us a price target of $260. This provides a general area on the chart where investors may decide to book profits, especially if other indicators are showing overbought conditions at the same time.
It’s also worth pointing out that the $188 breakout level will remain a significant technical area during future retracements as it has likely flipped from a major region of resistance over the past three years into a new area of support.
Amazon shares gained 3.9% on Wednesday to close at $193.61.
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