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This chart predicts trouble for Amazon

This chart predicts trouble for Amazon

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This chart predicts trouble for Amazon

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Why the market has more room to go

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Why the market has more room to go

Is Amazon about to go from worst to first?

The world’s largest online retailer is one of the worst-performing stocks in the S&P 500 year-to-date, down 16 percent. But that’s not stopping Goldman Sachs from adding it to its cart of stocks.

Goldman announced Wednesday that it added Amazon to its conviction buy list, citing a high return on investments.

(Watch: Goldman upgrades Amazon)

Now, the stock may be a poor performer on the year, but it has been nothing short of amazing in the past month, rallying more than 14 percent.

“I’m a long-term believer in this company, I think [CEO] Jeff Bezos is a visionary leader,” said Steve Cortes of Veracruz TJM.

But in the near term, Cortes said the stock has come too far, too fast.  “You’ve had a [almost] 20 percent rally in a matter of weeks off of those May lows,” he said. “And fundamentally, it is an incredibly overpriced company.”

According to Ari Wald of Oppenheimer, the technicals agree.

(Watch: Amazon's content power play)

“Do not chase this strength right here,” Wald said. “There will be better opportunities for it.”

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Amazon shares are up 15% in the past month, but has the stock come too far, too fast?

Amazon shares are up 15% in the past month, but has the stock come too far, too fast?

Wald stressed that Amazon’s stock is due for a pullback, mainly because it is rallying into a critical level of $340 per share. “This 340 level is the neckline of this prior top. Now, when I say neckline I mean it was prior support, it broke support and now that 340 is going to act as resistance.” Wald also pointed out the 200-day moving average, which comes right in at that same level.

But Wald does have some optimism for the stock and said the lows for the year are likely behind us.

So what to do? “Buy at around $315 [dollars per share],” he said.

Disclosure: AMZN is OUTPERFORM rated at Oppenheimer & Co.

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