Written by Rick Ackerman, Rick’s Picks
How Amazon’s Big Rally Could Trap Bulls
Amazon (NASDAQ:AMZN) is wafting into the ozone following the release of Q1 earnings after the market close on Thusday. Its institutional sponsors had methodically exhausted sellers two days earlier, letting the stock fall by a hundred points in just a few days. That set up the spectacular short squeeze underway now.
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From a low of 1405 on Wednesday, the stock has climbed 226 points, or 16%, in mere hours. The rally exceeded the two prior peaks that I’d said here earlier would determine whether or not the aging bull market lives or dies. AMZN not only surpassed those peaks, it has also pushed past the old record high at 1619 recorded on March 13. I expect the mania to top at exactly 1699.04, the target shown in the chart.
The bull market in stocks will continue until this occurs, but I will put out a screaming-yellow flag at that time, since this could be the last gasp of a bull market now in its 111th month and well overdrawn – a bull trap for the ages.
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