When I’m analyzing a stock I always pay close attention to how it behaves relative to the broader market. On the 2-hour chart of AMZN, with SPY plotted in the lower pane, something interesting happened on Friday that caught my eye. While the SPY pushed to a new swing high, clearly shown by the clean white trendline, AMZN failed to follow. Instead of matching the market’s strength, AMZN printed a lower high. In a rising market, that kind of divergence is often a warning sign.
To me, this signals relative weakness. When a stock can’t rally alongside the major index, especially during an upswing, it tells me buyers aren’t as enthusiastic as they should be. This doesn’t guarantee downside action, but it definitely raises a red flag.
The key level I’m watching now is the recent pivot low at 226.80. If AMZN breaks below that level, it would confirm this weakness and open the door for a move down toward the next support zone near 215. That’s the area I think price could gravitate toward if sellers step in with conviction.
I’ll also be keeping a close eye on volume. Weak breakdowns don’t mean much, but if we see expanding volume alongside any violation of 226.80, that would strengthen the bearish case. And, of course, overall market conditions matter. If SPY starts to roll over or shows signs of fatigue, that would only add fuel to the scenario.
For now, AMZN’s divergence stands out and I’ll be watching closely to see if it turns into something bigger.
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