Bullish Setup Case Study - $AMZN
$AMZN Daily - 2013
In 2013, Amazon formed a base lasting around 7 months. In late July of 2013 we saw a breakout on a nice tick up in volume. This roughly 9% move from the breakout was followed by a steady decline with below average volume (volatility contraction pattern). After a brief consolidation at the retest, price broke its downtrend and reclaimed its EMAs. This was then followed by a roughly 11% move before testing it's EMAs again. During this retest price briefly broke below the 55EMA and quickly got bought up. This consolidation ended up being one of that last great entries before this massive run heading into 2014.
What can we learn from this chart?
Follow the trend (learn more about trend analysis)
Look for volatility contraction patterns (learn more about VCP setups)
Follow accumulation patterns - indicated by marked volume bars
Initial pullback offers the best risk/reward