Saad Ullah
Amazon (AMZN) shares are hitting a crucial technical checkpoint as the stock returns to a price zone that kept it pinned down for months. After a strong rally pushed AMZN above this resistance area, the stock is now pulling back to see if that old ceiling can hold as new support. For traders tracking the bigger picture, this retest of the $240 zone could make or break the bullish case.
AMZN Approaches a Crucial Technical Retest
Amazon has circled back to a level that bulls and bears have fought over for quite some time. According to TrendSpider trader analysis, this technical retest could determine whether the recent breakout has staying power or fizzles out. The chart shows AMZN carving out an extended cup pattern through late 2024 into mid-2025, followed by a tighter handle formation.
Together, they create one of the most reliable bullish continuation patterns in technical trading. The breakout point sits just above $240, an area where sellers repeatedly turned the stock away before it finally pushed through.
Key Technical Levels Reflected in the Chart
The chart highlights several important elements worth watching. First, there's the retest of former resistance near $240, shown as a shaded horizontal band where heavy selling used to dominate. AMZN broke above this zone and is now testing whether it can flip into support. The cup-and-handle structure itself spans several months of price action, with the cup showing gradual accumulation and the handle representing a brief consolidation before the breakout attempt. Volume profile data reveals substantial trading activity between $210 and $240, confirming this zone has been a major area of interest. The momentum indicators at the bottom show increasing green bars during the recent upward push, suggesting buying pressure was building before this pullback.
Why This Setup Matters Now
AMZN's chart setup comes at a time when the company's fundamentals are firing on multiple cylinders. AWS keeps delivering solid revenue growth while Amazon pours resources into AI infrastructure and cloud expansion. The e-commerce and advertising divisions continue performing well, and investors are gravitating toward mega-cap tech stocks riding the AI wave. These factors give extra weight to what happens at this technical level. If AMZN holds above $240, it could signal the start of another leg higher. A breakdown below this zone might send the stock back to earlier support levels.
Recent momentum around Amazon has also been reinforced by growing AI news coverage, highlighting the company’s expanding role in cloud infrastructure, model training, and enterprise-level artificial intelligence adoption.
Saad Ullah
