Chart of the day

AMZN is bouncing off the strong support 123. This bounce is coming after the retest of broken channel resistance and it shows a strong resilience of this stock and it tends to confirm that we are in the short-term fifth wave higher.

This is still viewed as the long-term five-wave upside and to invalidate the extension higher and to completely reverse lower we need to see a break below 123. The probability of this happening is not so high.

Long trades are favored to be opened here with a small risk and a stop loss just below 123 and you can trade with options as well. We favor the long trade entries at this stage as we see an ongoing price action to continue higher and to invalidate the downside extension. Short trades could come only upon a confirmed break below 123.