AMZN Rising Wedge

A Super-Extended Move is a Neely Tell

AMZN is Now Coloring in the Top Third of the Red Rising Wedge

AMZN is Now Coloring in the Top Third of the Red Rising Wedge – A Neely Tell of a Major Top

AMZN is now coloring in the top third of the red rising wedge. That represents a super extended move and is a Neely tell of a major top forming.

AMZN could continue moving up the rising wedge, extending it into its very tip.  Or it could start a small fast megaphone inside the wedge to work the price to the wedge bottom before breakout into a crash from here.

Or it could extend the rising wedge into its tip then crash to the implied price channel bottom and make a new high from there before collapsing to the wedge bottom.

The first technical target for a correction is the rising wedge bottom at roughly 500.  Ultimately AMZN has to work its way back to the bottom of the purple rising megaphone at 100 as well.  But the route to that target could be very complicated and even include a new all-time high from 500 en route.

Unless some disaster is about to befall AMZN (like an antitrust suit and break-up), the most likely scenario is a drop to roughly the rising wedge bottom to establish a new megaphone trading range across roughly 600.  Some years down the road, from a new high, that megaphone could include a drop to 100.

XLE Megaphones with Potential Melt-Up Set-Up

XLE has a Potential Sornette Melt-Up Set-Up on its 60-Minute Chart

XLE has a Potential Sornette Melt-Up Set-Up on its 60-Minute Chart

XLE has formed a beautiful megaphone inside a megaphone on its 60-minute chart.  Even better, XLE has formed a potential Sornette melt-up launch pattern across VWAP of the red megaphone.

An upwards breakout through the navy blue megaphone VWAP, typically with a double bobble as the orange megaphone fails to retrace to VWAP, would target the red and blue megaphone tops.  The move would usually be fast (green scenario).

The light blue scenario represents a series of megaphones inside megaphones across the navy megaphone VWAP.  We’d usually see this is a triangle right shoulder is forming on the potential inverse head and shoulders bottom on the daily chart (see below).

The purple scenario represents a top before a collapse back to the 2016 (see below).

 

XLE Inverse H&S Bottom with Right  Shoulder Triangle vs Neely Set-Up

XLE Inverse H&S Bottom with Right Shoulder Triangle vs Neely Set-Up

XLE formed a price channel on its move down from the June 2014 high to the January 2016 low.  That kind of move is a Neely set-up for a partial retrace then retest of the low before a melt-up back to the all-time high (purple scenario).

The green scenario on the daily chart is a triangle right shoulder on the inverse H&S before a breakout to retest the all-time high.  It’s possible but unlike (because of the megaphones on the 60-minute chart) that XLE will break out of that inverse H&S without a triangle right shoulder.

The Neely set-up is the favorite longer-term.

VZ Rising Megaphone Set-Up Back to All-Time High

VZ has Put In a Neely Crash Set-Up That Targets the All-Time High

VZ has Put In a Neely Crash Set-Up That Targets the All-Time High

VZ put in a long-term Neely B-Failure Flat set-up when it crashed into the 2002 low, put in a partial retrace and extended topping into the 2007 high, and then crashed back to a retest of the 2002 low in 2008.

The retest of the low set up a move back to the pre-crash high, and VZ is moving up to that high within the red rising megaphone.

A head and shoulders top within that red rising megaphone, with a right shoulder bounce off the rising megaphone bottom, would set up a breakout into a move to the red rising megaphone bottom.

IBB Rising Megaphone

IBB Needs to Correct to the Bottom of its Red Rising Megaphone but it could Extend First

IBB Needs to Correct to the Bottom of its Red Rising Megaphone but it could Extend First

IBB needs to correct to the bottom of its red rising megaphone. But it didn’t complete a proper head and shoulders top inside the formation before breaking out.

That would often mean the formation is going to extend to form the blue rising megaphone, which needs a new all-time high to confirm.

IBB seems to be forming a rising megaphone off its January 2017 low (orange).  It needs a new high to confirm.  That could be a partial retrace of the move off the July 2015 high before a collapse to the red rising megaphone bottom (green scenario).  Or it could complete and extend to form the navy blue rising megaphone (purple scenario) and gray rising megaphone (pink scenario) to get to a new all-time high.

The purple scenario would imply that IBB is setting up a long-term megaphone across roughly 300.