Is Amazon Heading for New Highs?
Amazon stock has been trading incredibly well ahead of Prime Day. Here's how the stock is setting up now. Its been months since weve seen a strong, sustained rally in Amazon (AMZN) - Get Report. Scratch that - its been quarters since weve seen the stock really put on a show. Despite two blowout earnings reports this year, Amazon stock hasnt been able to find its mojo. Investors have been clamoring for a stock split, while the announcement that CEO Jeff Bezos will step down has certainly caused some hesitancy. With Prime Day just around the corner, Amazon stock has been acting better. The stock has rallied in seven of the past nine trading sessions, with its two down days registering losses of just eight basis points and two basis points, respectively. Just last week, shares were still flat for the year, and if we measure from the September 2020 high Amazon is actually down about 1%. Apple (AAPL) - Get Report has traded in a similar manner, consolidating its gains from the first half of the year for the last several quarters. That stock may be warming up though. Apple and Amazon are holdings in Jim Cramer's Action Alerts PLUS member club. Learn more now. Trading Amazon  Daily chart of Amazon stock. Chart courtesy of TrendSpider.com  As you can see on the daily chart, Amazon has been enjoying a strong rally ahead of its two-day Prime Day event, starting on June 21. While the prior pullback and consolidation looks pretty sloppy, theres actually a lot of order among the chaos. Specifically, the 50-week moving average was very dependable support. Not just once, either. This measure was support many times over the past few months. Eventually, the stock was able to push through range resistance near $3,350. While it has cleared this area, its not quite in the all-clear just yet. Just like most big tech stocks, Amazon soared to new all-time highs in September and topped out, hitting $3,552. The stock barely edged out new highs in April, but flushed lower right after doing so. Now the $3,550 area looms large once again. If Amazon can give us a clear breakout over this level, it could set the stage for a strong rally in the second half of the year. As much as the bulls have been waiting for a large and sustained rally, I think a dip would be healthiest first. Specifically, a sell-the-news pullback to its Prime Day event down to the 10-day moving average could give the stock the perfect rest it needs to surge to new highs and set it up for a second-half run. Longer-term traders can consider using the $3,950 to $4,000 range as their target, should Amazon stock break out to new highs.