Don’t Get Trapped By Amazon (AMZN)

I recently tweeted that the downfall in Amazon (AMZN) was nothing to be scared about. If anything, it was just an excellent opportunity to get into the stock at a lower price.

Over the last couple of days, Amazon has made up nearly 50% of what it initially lost and that quick move may get some traders trapped in the short-term.

The relative strength index (RSI) is an indicator I use from time to time that basically tells you the strength of a move – above 50 is bullish and below is bearish.

In the chart below, Amazon is currently below 50. Take into account that the largest surrounding volume is a huge red block and we may see some more consolidation or lower prices before Amazon officially heads higher.