Preps for Push Higher

04/25/2011 11:53 am EST


Traders may want to focus attention on shares of (AMZN) this week, as a number of technical stars look aligned for a bullish move higher. (AMZN) had a big move higher last Wednesday and Thursday off of a double hammer at support near the 50- and 100-day simple moving averages (SMAs).

With a Moving Average Convergence Divergence (MACD) indicator that is just crossing positive and a Relative Strength Index (RSI) sloping higher, it looks poised to continue this week.

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Also note that there is an inverse head-and-shoulders pattern forming that will confirm if it gets through the neckline at about $187.50. The target on a break would be $222.61.

First resistance is at $191.60. Over $191.60, you could consider taking some money out of the trade and rolling it into July 195 calls, which went out at just under $7 on Thursday with the plan to eventually spread them against July 225 call spreads as the price nears $200.

By Greg Harmon of

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