Round Number Support?
My readers know I am a big proponent of round number theory. Stocks will often face pushback there the first time they come into contact with them, but if they break through, that former stubborn resistance can become good support. Two of the biggest names within technology, are testing this philosophy right now. Below is the chart of AMZN and how we looked at a WEEKLY bullish ascending triangle that aligned with the very round 2000 figure. The pattern is is about 18 months long, making it a bit more success prone. The prior 2 weeks CLOSED 50 and 90 handles off intraweek highs respectively to finish in the lower half or at lows for the weekly range, giving a warning of a possible drawdown. This area now is a battleground area which bulls must defend. There will be an abundance of stops near this location, so perhaps one could give a little leeway on their stops. But this name recorded a very powerful, good looking breakout. Should it fail it would be a possible red flag that more downside is to develop. AAPL attempted to finish above the 300 number, but still CLOSED below its 50 day SMA for the first time since last summer. These names will make a big impact on where the overall markets gravitate toward in the short term.