It appears that Amazon shares are gaining more upside momentum recently after breaking above the complex inverse head and shoulders pattern on its longer-term time frames. Price has gapped up from the consolidation then proceeded to break past the 200 simple moving average, signaling a change in trend.
However, MACD is already indicating that buyers are tired, with the indicator moving at the overbought levels. This could be a sign that a pullback is in the cards before Amazon shares can head further north.
Amazon Shares Outlook
Take note that the 50 SMA is still moving below the 200 SMA, which means that the trend shift hasn’t been confirmed just yet. RSI is also moving closer to the overbought levels, suggesting that price could still turn.
If Amazon shares are able to make a strong break past the $375/share area, it could be a sign that buyers are much stronger and would push the pair much higher. Last week, the release of Amazon Kindle Unlimited was key in pushing Amazon shares higher.
This service allows users to download an unlimited amount of e-books and audiobooks for $9.99 a month, from a source spanning 600,000 materials. Bear in mind though that Amazon’s battle with publishing company Hachett is still weighing on its share trading from time to time.
The release of the Kindle Unlimited service could complicate things further as several big-name publishers still declined to have their books in the service. Books published by HarperCollins and Simon & Schuster aren’t offered and those from Penguin Random House are notably absent. Amazon has not said how authors and publishers will be paid for participating in Kindle Unlimited, but it’s unlikely that the models currently used for e-book sales through their store will do the trick.
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