Amazon's Points to a $295 Target – Focus on this cup and handle pattern
Earlier in my article, I mentioned my bullish outlook on $Amazon.com Inc (AMZN.CA)$ due to a suspected cup and handle pattern. Now, with the price breaking out, the cup and handle pattern has officially been completed.
Based on the current chart pattern—a cup and handle, which is a bullish continuation pattern—I believe the price is likely to rise.
How high can the stock price go with the cup and handle pattern?
First, let’s talk about how to calculate the profit target of a cup and handle pattern:
1. Measure the Depth of the Cup: Find the distance (price difference) between the highest point (the "rim") and the lowest point (the "bottom") of the cup.
2. Add the Depth to the Breakout Point: Once the price breaks above the resistance level (the top of the handle), add the measured depth of the cup to the breakout level.
In this case, amazon predicted target price = Depth of cup (106) + breakout point 189 = $295
Re-entry into a cup and handle pattern can occur when the price pulls back to the breakout point after initially breaking out.
In this case, I have identified two potential support levels for a re-entry:
1. $189
2. $201
If the price retraces to these levels and holds, it may offer a favorable re-entry opportunity for traders looking to capitalize on the continuation of the bullish move.
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