Amazon (AMZN) resumed its decline after a corrective bounce. The move higher formed a three-swing recovery in wave 4 after an earlier three-wave drop from the peak at 247.77.
The wave 4 bounce stayed corrective and did not alter the downward trend. After wave 4 ended, price turned lower and began a new impulsive move.
The decline is now in wave 5 and is developing as a five-wave structure. This supports the continuation of the broader downward sequence.
The current leg lower is projected to reach the 1.236 external retracement of wave 4 near 192.96. A further target is near 187.17 if the decline extends.
Any rallies are described as corrective and expected to remain below the wave 4 pivot. The trend remains bearish in the short term as wave 5 continues.
Given that Amazon appears to have completed its corrective bounce and is now turning lower, we should consider strategies that benefit from a declining stock price. This suggests that buying puts or establishing bear call spreads could be effective ways to position for the expected move down. Any short-term strength should be seen as a selling opportunity rather than a change in the primary trend.
This bearish technical outlook is supported by recent economic data. The latest U.S. Census Bureau report for January 2026 showed an unexpected 0.8% drop in retail sales, signaling that the consumer may finally be weakening after a resilient 2025. This directly pressures Amazon’s core e-commerce revenue and adds fundamental weight to the technical case for lower prices.
We are also seeing this negative sentiment reflected in the options market. The 30-day put/call ratio for AMZN has climbed to 1.25, a level not seen since the October 2025 sell-off, indicating traders are increasingly betting on or hedging against a further decline. This confirms that the broader market is positioning for the downside sequence to continue.
Concerns are also growing around the cloud computing space, a key profit driver for Amazon. Recent industry analysis covering the fourth quarter of 2025 showed that competitors like Microsoft Azure gained market share, putting pressure on AWS’s growth trajectory. This fundamental headwind could make it difficult for the stock to find buyers.
With this backdrop, we should prepare for a test of the 192.96 price level in the coming weeks. If selling pressure accelerates, which is possible given the weak consumer data, the next objective near 187.17 comes into play. The peak of the recent wave 4 bounce serves as a clear invalidation point for any bearish positions.
