Amazon (AMZN) has resumed its decline after a corrective bounce. The rebound formed a three-swing recovery in wave 4, following an earlier three-wave drop from the 247.77 peak.
The wave 4 bounce stayed corrective and did not change the downtrend. After wave 4 ended, price turned lower and began a new impulsive move.
The decline is now in wave 5 and is unfolding as a five-wave structure. This supports the idea that the broader down sequence is still in place.
The current leg down is projected to reach the 1.236 external retracement of wave 4 near 192.96. If the selloff extends, a further target sits near 187.17.
Any rallies are expected to be corrective and to stay below the wave 4 pivot. The short-term trend remains bearish as wave 5 continues.
Since Amazon appears to have finished its corrective bounce and is turning lower, consider strategies that benefit from a falling stock price. Buying puts or using bear call spreads are two ways to position for a continued move down. Any short-term strength may be better viewed as a selling opportunity, not a shift in the main trend.
This bearish technical view is also backed by recent economic data. The U.S. Census Bureau’s January 2026 report showed an unexpected 0.8% drop in retail sales. This suggests the consumer may be weakening after a strong 2025. That softness can pressure Amazon’s core e-commerce business and adds fundamental support to the technical downside case.
Options data also reflects this negative tone. AMZN’s 30-day put/call ratio has risen to 1.25, the highest since the October 2025 sell-off. This suggests more traders are betting on, or hedging against, further downside and aligns with the expectation that the decline may continue.
Concerns are also building in cloud computing, a major profit engine for Amazon. Industry analysis for Q4 2025 showed competitors such as Microsoft Azure gaining market share, which may weigh on AWS growth. This headwind could limit buying interest in the stock.
With this setup, a test of 192.96 looks likely in the coming weeks. If selling pressure increases—especially with weak consumer data—the next level to watch is 187.17. The high of the wave 4 bounce is a clear invalidation point for bearish positions.
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