The volatility zone between $9.50 and $10 raised another red flag. As you can see, sharp reversals characterize these price levels. Why does this happen? Certain chart points hide significant numbers of traders and investors sitting in losing positions because they got trapped in sudden reversals. This volatility usually needs to unwind before price can move above it.
The key to this trade was the market number $10. If Amazon were able to mount it, the move would complete two bullish patterns and draw in new buyers. First, it would trigger a cup-and- handle breakout on the shorter-term chart. More importantly, it would confirm a well-formed double bottom on the daily chart.