In the realm of technical analysis, the Elliott Wave theory has gained popularity for its ability to predict future price movements in financial markets. By identifying repetitive wave patterns, traders and investors can anticipate potential market trends. In this article, we will delve into the Elliott Wave forecast for AMZN (Amazon) as of November 16, 2023, taking a long-term perspective.
Understanding the Elliott Wave Theory
The Elliott Wave theory, developed by Ralph Nelson Elliott in the 1930s, suggests that market price movements follow predictable wave patterns. These patterns are composed of impulsive waves, which move in the direction of the overall trend, and corrective waves, which move against the trend. The theory is based on the concept that investor psychology drives these waves, resulting in repetitive patterns.
AMZN’s Elliott Wave Analysis
According to the long-term Elliott Wave analysis for AMZN, we can identify three significant waves: the 1st wave, the 2nd wave, and the ongoing 3rd wave.
1st Wave: From 72 to 146
The 1st wave of AMZN can be traced back to its early days, starting from a price of 72 and reaching a high of 146. This wave represents the initial surge in price as the stock gained popularity and investors recognized its potential.
2nd Wave: The Zigzag Fade Down to 118
Following the 1st wave, AMZN experienced a corrective wave, known as the 2nd wave. This wave took the form of a zigzag pattern, leading the price down to 118 from its previous high of 146. The 2nd wave is a common occurrence in Elliott Wave analysis, often retracing a significant portion of the 1st wave.
Wave 3: Targeting 220-225
The current wave, Wave 3, commenced after the breakout from the previous high of 146. This wave is expected to exhibit strong upward momentum, driving the price of AMZN to new heights. Based on the Elliott Wave principle, Wave 3 is projected to reach a target range of 220-225.
The Minimum Target: 1.618 X W1 in a Wave 3
In Elliott Wave analysis, it is common to use Fibonacci ratios to determine potential targets for each wave. In the case of Wave 3, a commonly observed ratio is 1.618 times the length of Wave 1. Applying this ratio to AMZN’s Wave 1, which spanned from 72 to 146, we arrive at a minimum target of 220-225 for Wave 3.
