Amazon to get cut in half? If you look at these charts, it might not sound so crazy

High-momentum FANG stocks have been hammered for months.

Facebook, Amazon, Netflix and Google parent Alphabet, the premium tech stocks that led markets to records earlier this year, have plummeted by double digits since October.

If the market continues to pull back, one of those names could be setting up for an even bigger fall, said Todd Gordon, founder of TradingAnalysis.com.

By charting a trend channel in Amazon, Gordon has identified where its shares could drop before finding a bottom.

"I'm drawing a trend line connecting three major swing points in this particular trend," explained Gordon to CNBC's "Trading Nation" on Friday. "Then what you do is you extend the trend lower to the lowest swing point on this chart. ... So if we were to break through support, would a move back to this level look obnoxious or not possible? I say 'no.'"

That next level of support in Amazon's charts is down at $850, according to Gordon's technical analysis. A drop of that magnitude implies a 47 percent decline from Friday's close. It would also mark a 59 percent slump from its September record high.

"It could be a tremendous buying opportunity," Gordon added. "Has Amazon ever done anything like that? Absolutely."

Gordon points to a stretch where Amazon went from above $100 in October 2007 to below $35 in November 2008. That 11-month sell-off marked a 66 percent decline.

"Obviously this is dependent on a stock market that is continuing this bear market," Gordon said. "If the S&P were to break through 2,500 support, would a retest of these breakout levels back here seem not possible? I think it's quite possible. 2,100, 2,150 in the S&P."

The S&P 500 would need to fall nearly 4 percent to break through 2,500 support. A swing to 2,100 would be a 19 percent drop.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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