As Amazon.com prepares to report earnings results on Tuesday, a potential bullish pattern is developing on its daily chart.
Since hitting lows at the end of December, the e-tail giant's shares have been in recovery mode and are now rallying back toward the price gap of mid-November. The chart below shows a somewhat irregular " inverted head and shoulders " pattern.
If AMZN breaks above $197, this bullish pattern will become active. The upside potential, shown by the green vertical line, could see the stock reach to the $225 level.
On worse-than-expected earnings news, the shares would probably retest the $180 level, an important support area in the last year. The $170 level might be reached on particularly negative results.
(Chart data provided by Thomson Reuters)
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