AMZN, NFLX and MSFT Forecast – Major US Stocks Look Strong, but Overbought in Some Cases

AMZN Technical Analysis

The market for Amazon looks like it is going to be a little softer during the early hours on Wednesday, but quite frankly, I think we’re just stuck in a bit of consolidation. This does make a certain amount of sense, considering that we gapped higher only to pull back a bit, and now we’re just kind of hanging out in this area above the $200 level. I do favor the upside, but I also recognize that traders will be looking at the possibility Fibonacci studies offering a little bit of technical resistance in the form of the 61.8% Fibonacci retracement level, but if we break above there, that opens up a move all the way back to the $240 level over the longer term.

NFLX Technical Analysis

Netflix, of course, remains very bullish. It is basically just drifting higher overall. I think given enough time, we probably get a little bit of a pullback, but that pullback should be thought of as a potential buying opportunity. This market probably sees a certain amount of support underneath current pricing near the $1,170 level, with the 50 day EMA sitting right around the $1,100 level. I have no interest in trying to sell this market. I think this is a buy on the dip situation where Netflix continues to go higher over the longer term.

MSFT Technical Analysis

And finally, Microsoft is a little bit positive in pre-market trading, but we are facing a major swing high in the form of the $470 level. So, between that and the massive gap that we saw after earnings, I think you’ve got a situation where you desperately need to see some type of pullback. I certainly would not be pulling the trigger on buying stock up at this point, chasing price. You’ve missed the move at this point. That doesn’t mean you can’t join it later when it pulls back, perhaps back to the 50 day EMA or even just go sideways for several weeks. But this is a market that has run away.

Chasing here, the risk of reward just isn’t going to be part of what’s working for you. Yes, of course it can continue to go higher, but there will be a deep correction sooner or later. Think of it this way. If you bought Microsoft or even owned it near the $390 level when we launched, you were already up about $72 a share. So, you would have to start to think about trimming your position, making some profit and moving on. I suspect we’re about to see that.

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