No one should doubt Amazon.com’s power to disrupt new industries. While the onetime online bookstore has grown to dominate retail, it has also become a major player in businesses ranging from cloud computing to Hollywood — and even has experimented seriously with drones.
It’s no wonder that fear strikes investors and executives when they learn — or even hear rumors — that Amazon wants to compete in their industry. It’s the business-world equivalent of seeing viking sails appear on the horizon.
Just last month, grocery store stocks plunged when news arrived that Amazon planned to acquire trendy, upscale grocer Whole Foods. Then Amazon struck again late last week, with home improvement stores taking the hit.
Here are five industries that have all suffered recently from what one stock analyst has dubbed, “the Amazon effect” — the threat, real or perceived, that Amazon is on the verge of upending their business models.
Home Improvement Stores
Sears Holdings announced it had struck a deal for Amazon to sell the popular Kenmore-brand appliances. Appliances aren’t a perfect fit for online commerce; installation can be a big job and requires expertise. But some investors headed for the exits anyway: Shares of Home Depot closed down 4% by end of day, while Lowe’s fell 5.5%.
Last month Amazon planned to acquire Whole Foods for $13.7 billion. Whole Foods’ roughly 450 stores would be turned into killer distribution hubs, enabling Amazon to deliver fresh groceries and other goods to upscale neighborhoods — or that the stores would become pickup points allowing customers to buy online, then have groceries put right in the trunks of their cars. Wall Street figures the consequences for other grocers would be serious: Kroger shares plunged more than 9% on the day the news emerged, while Target fell 5.1% and Wal-Mart dropped 4.7%.
Meal Kit Companies
or meal kit company Blue Apron, however, rumors that Amazon might be preparing a competing service put a huge damper on the party. Blue Apron had originally planned to sell shares for $15 to $17 late last month, but ended up settling for $10 after Amazon’s Whole Foods purchase gave investors jitters. Blue Apron took another big hit early last week when news broke that Amazon had filed for a patent, and may already be testing its own kits. Blue Apron shares closed Friday at $6.55, having lost roughly a third of their value.
Real Estate Brokers
Earlier this month, in the runup to Amazon’s popular Prime Day sale, some shoppers noticed what appeared to be the beta version of a new “Hire a Realtor” service on Amazon’s home page. Soon screen shots of the page were circulating on trade Web sites, while the stock price of would-be competitor Zillow tumbled 3.5%.
The industry breathed a sigh of relief when the dummy Web page disappeared a day later, as quietly as it had arrived, and the National Association of Realtors reassured members that Amazon does not have permission to use the trademarked word “realtor.” Zillow stock also bounced back.Yet trade publication The Real Deal predicted that Zillow “may soon meet its match.”
Overall, the bias in prices is: Upwards.
Short term: Prices are moving.
Intermediate term: Prices are trending.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 977.33.
The projected upper bound is: 1,068.12.
The projected lower bound is: 1,001.39.
The projected closing price is: 1,034.75.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 6 rising windows in the last 50 candles–this makes the current rising window even more bullish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 82.5429. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 5 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 65.71. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 30 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 111.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 8 period(s) ago.
Rex Takasugi – TD Profile
AMAZON COM closed up 7.376 at 1,033.046. Volume was 78% below average (consolidating) and Bollinger Bands were 43% wider than normal.
Open High Low Close Volume
1,028.340 1,034.770 1,027.428 1,033.046 811,472
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,015.19 989.17 868.32
Volatility: 12 22 23
Volume: 2,890,225 3,762,336 3,728,076
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
AMAZON COM gapped up today (bullish) on light volume. Possibility of a Common Gap which usually coincides with a lack of interest in the security. Common Gaps are fairly irrelevent for forecasting purposes. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
AMAZON COM is currently 19.0% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of AMZN.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AMZN.O and have had this outlook for the last 4 periods.
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