Trading Idea: - Is Amazon close to Resistance?

Published on Thursday, 22 November 2012 08:16 Written by TradersHuddle Wire

New York, November 22nd (TradersHuddle.com) - Shares of Amazon.com, Inc. (NASDAQ:AMZN) are trading very close to calculated resistance at $238.71. The stock ended the trading session at just $238.03, which is near levels that make it difficult to buy or start a position.

Amazon.com, Inc. (NASDAQ:AMZN) operates as an online retailer worldwide. The company serves its consumer customers through its retail Websites and focuses on selection, price, and convenience. It also offers programs that enable seller customers to sell their products on its Websites and their own branded Websites. One of the biggest seller items for Amazon is books and e-books, which can be read with Amazon's Kindle e-reader.

Amazon's stock range is defined by its calculated support defined at $218.18 and by the resistance level at $238.71; the stock is clearly over-extended from support, making it harder for participants to establish fresh longs.

Traders don't have a clear entry point for Amazon. However, as the stock pulls back towards $218.18 it will definitely provide a reference point to establish a trade. On the other hand, if the stock breaks above its resistance level at $238.71 then traders will get an opportunity to enter the stock as it moves to a higher range.