AMZN - Upside Target

Amazon (AMZN) has been enjoying a spectacular rally since the February 2016 lows and has been one of the leading  NASDAQ stocks taking us higher. The question on everyone's mind is how much higher can this stock go. Below is a weekly bar chart of AMZN over the past 2 years.

In MAY the stock broke out above point B and in June went on to test that level before continuing on higher. If you measure the B-C swing and add it to point B you get the 900 area for a potential upside target. Another method for projecting where AMZN may rally to is to simply apply the AB=CD concept. If you take the rally of points A-B and add it to point C you get roughly the 875 area. So there you have it, two different measurements  suggesting if AMZN continues its rally the 875 to 900 area should be the most likely upside target.

Oil Stocks Looking Bullish

The oil stocks have been a bit challenging to trade lately with many mixed signals until now, Below is a  weekly chart of XLE (energy stocks)  and in the lower pane is a weekly chart of Crude oil.

If you look closely at the chart you will see a divergence that's taken place over the last 6 weeks. While crude oil has made a new swing low the XLE has made a higher swing low. This in my opinion is bullish for XLE as it shows there are buyers supporting the market.

Right now XLE is up against a rather significant resistance level at 70 to 71 but given the recent divergence between crude oil and oil stocks I am leaning towards a significant breakout to the upside for XLE.

NASDAQ - Continuation Or Reversal

The indices are holding their breakout levels which is a bullish sign but it appears a few weeks of consolidation would be constructive for this bull market to continue.

Above is a weekly chart of the NASDAQ (QQQ) and as you can see this past week's range has been one of the smallest  weekly ranges we have seen for quite awhile. When you see an inside week after a breakout it is very important to watch the high and low of the prior week as those are pivotal levels which can trigger a move. The two levels I will we looking at is the high of 118.78 and the low of  114.22. A move above 118.78 would suggest further upside while a move below 114.22 could be a sign of a breakout failure.