Amazon (AMZN) shares have hit record highs recently, boosted by optimism about growth in the company’s cloud business.

The company reported better-than-expected quarterly results last week. Investors were particularly impressed with the Amazon Web Services (AWS) business, which grew revenue at its fastest pace in seven quarters and continues to invest significantly in artificial intelligence (AI) amid surging demand.

Amazon shares fell slightly on Friday, after closing at an all-time high the previous session. The stock, which is trading at around $208, closed the week with a 5.2% gain, outpacing the S&P 500’s 4.7% increase.

Below, we break down Amazon’s chart and use technical analysis to identify important price levels worth watching out for.

Symmetrical Triangle Breakout

Since their July peak, Amazon shares traded within a four-month symmetrical triangle before breaking out above the pattern in late October. In a win for the bulls, buying momentum has carried into early November, with gains accelerating this week on above average volume, indicating a continuation of the stock’s longer-term uptrend.

While the relative strength index (RSI) confirms strong price momentum with a reading nearing 70, it also increases the chances of short-term dips as investors lock in profits after the stock’s recent run.

Let’s project a chart-based price target to watch if Amazon’s move higher continues and locate several key support levels to monitor during periods of weakness.

Chart-Based Bullish Price Target

Investors can project a chart-based bullish price target using a bars pattern, a technique that analyses prior historical trends to predict future moves.

We can apply this to the Amazon chart by extracting the stock’s trend higher from October last year to July this year and reposition that move from the early August low. The technique forecasts a target of around $250, which sits about 20% above Friday’s closing price.

If such a move were to eventuate, it would complete a basic Elliot Wave pattern with five distinct upswings playing out, which we have numbered on the chart above.

Key Support Levels to Watch

Upon an initial retracement, investors should eye the $200 level. This area on the chart would likely attract support around the psychological round number and the July swing high.

Finally, a deeper pullback could see Amazon shares revisit lower support near $188, a location where investors may seek entry points near a trendline connecting multiple peaks on the chart from July 2021 through to September this year.

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As of the date this article was written, the author does not own any of the above securities.