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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 231.69+1.7%3:59 PM EST
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To: Mike M who wrote (14306)8/22/1998 3:47:00 AM
From: Tenpole  Read Replies (2) of 164684
 
Mike,

I agree that the situation is far from clear - yesterdays action had the opportunity of confirming and it did in some ways but not in others.

The interesting issue has been the volume - there is a lot of money still on the sidelines waiting for a definitive move one way or the other. All of which adds up to confusion. We know, though, that the price has been manipulated in recent weeks and yesterday marked the expiration of the August options. That was as good a reason as any for seeing the action we did. The reason why I like the idea of this being a topping pattern is that on the 8/13 and 8/19 it made a run at a breakout and fell back on good volume. Both highs for the day were on the trendline that comes sloping down from the two closing highs on 7/6 and 7/20. Momentum is declining and most other indicators are overbought. This stock was driven up by a short squeeze and the level of short activity is still going to disrupt the market for a period of time but the likely hood of another short/momentum burst to the upside seems to be dwindling.

Candlestick indicators are very easy to invalidate (or rather to 'fail to confirm'!) but right now they seem to fit in with other indicators - which is how I try to use them - which makes a persuasive argument. All in all though, no indicator will predict, it will only tell us things about the market that may allow us to draw certain conclusions. So, to that end, the candlesticks are indicating that the market doesn't want to go higher. For now!!

Sorry to hear about your puts.

T
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