Amazon.com, Inc. AMZN gapped down about 1% to start Fridays trading session and after some slight volatility in the morning, the stock settled to trade flat just under the $95 level.

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Despite the S&P 500 trading higher in an uptrend since Oct. 13, Amazon, which makes up 3.7% of the ETF, has failed to significantly rebound.

A bearish reaction to the e-commerce and streaming giants Oct. 27 third-quarter earnings print caused Amazon to plunge to a new 31-month low of $85.87. Although the stock has rebounded slightly from that level, the psychologically important $100 level has acted as strong resistance, holding Amazon back from making any big move north.

Amazon has also been trading on declining volume since its last earnings print, which indicatesthe stock is running out of both buyers and sellers as it consolidates. Declining volume often precedes a large increase in trading volume, which helps break a security up or down from its current pattern.

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The Amazon Chart: Amazons sideways consolidation is taking place within a triangle pattern, where the stock has been making a series of lower highs and higher lows. Amazon is set to reach the apex of the triangle on Dec. 9 and if the pattern is recognized, traders can watch for the stock to break up or down from the triangle on higher-than-average volume. If Amazon breaks down from the pattern, bullish traders will want to see if Amazon forms a reversal candlestick at the $85.87 low, which would cause a bullish double-bottom pattern to form. If that happens, Amazon could bounce significantly and possibly form a new uptrend. If Amazon breaks up bullishly from the triangle, a new uptrend will confirm. If that happens, Amazon could rally to fill an upper gap that exists between $104.87 and $109.77. Bearish traders want to see Amazon break down from the triangle and form a new 52-week low. If that takes place a longer-term downtrend could be in the cards. Amazon has resistance above at $95.49 and $99.88 and support below at $92.18 and $90.77.

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