Amazon’s stock (AMZN) is currently flirting with a significant threshold, trading at $195.00—just shy of yesterday’s Value Area High (VAH) of 195.25. This level acts as a pivotal point; prices must either break through it or pull back for more favorable buying opportunities.
OrderFlow Intel data indicates a notable surge in buyer activity, especially around the 193.89 mark, which served as yesterday’s Point of Control (POC), and 194.35, aligning with yesterday’s Volume Weighted Average Price (VWAP). Despite this influx, sellers have put up a solid front recently, possibly due to profit-taking or liquidity constraints, but the market’s rebound suggests buyers are gradually reclaiming control. The ability to surpass and sustain above the critical 195.25 marker will be crucial in determining near-term trends.
Now, let’s delve into an actionable trade plan for AMZN. For those considering a long position, buying 100 shares at $194.39 accounts for a third of the intended budget without a stop loss in place. Another third can be acquired at $192.27. The final batch of 100 shares is smartly positioned at $188.52, a fallback price ensuring a risk-managed entry point if the market dips further, setting a stop loss at $187.89. Your average entry price would then be $191.73, leading to a comprehensive 300-share position costing around $57,518.
Assessing profit and loss scenarios, if AMZN drops 2% to $187.89, an anticipated loss is $1,150.36. Conversely, a target price of $203.23 offers a potential gain of $3,451.08. Leaving 50% of the position as a ‘runner’ allows for capturing additional gains over the long haul.
The analysis underscores that buyers are gaining strength again, even after previously heavy selling resulted in absorption. This pattern suggests that buyers are strategically accumulating positions, reinforcing a bullish sentiment. The strategy involves buying above the VWAP at $194.39 to engage early, followed by another entry above the previous day’s Value Area Low (VAL) at $192.27—a zone ripe for defensive buyer activity. The deepest entry is planned at $188.52, corresponding to the October 31st VAH, managing risk even if it isn’t filled. This layered buying strategy ensures a solid risk-adjusted position.
Profits are safeguarded by marking the $203.23 level as a reasonable waypoint. If reached, adjusting the stop loss to break-even may protect capital while pursuing further gains.
Rooted in expert analysis of order flow and volume profiles, this plan provides a carefully structured entry strategy. The approach doesn’t chase price; it relies instead on strategic pullbacks. Scaling buys (1X → 2X → 3X) ensures a better average price, allowing for flexibility against market fluctuations and seeking longer-term growth. This ‘Buy the Dip’ strategy beautifully balances risk management with the pursuit of lasting upsides, representing a calculated method of investing in AMZN.
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