Amazon.com, Inc. (NASDAQ:AMZN) New Grocery Chain Shouldn’t Worry Rivals — Yet

Amazon.com, Inc. (NASDAQ:AMZN) New Grocery Chain Shouldn’t Worry Rivals — Yet

Amazon.com, Inc. (NASDAQ:AMZN) New Grocery Chain Shouldn’t Worry Rivals — Yet

Reports last month that Amazon.com (NASDAQ: AMZN) had signed leases for its new grocery store chain that is separate from Whole Foods failed to disturb its rivals in the way that prior announcements of its moves into physical retail have.

While that’s partly because the original news about the new-concept chain was first released earlier in the year, it’s also because many of its rivals may not seem to fear Amazon’s presence as they once might have.

Brick-and-mortar retail is proving more of a challenge to Amazon than many thought it would, and grocers like Walmart (NYSE: WMT) and Kroger are well fortified to resist an assault on their position.

The high cost of retail

Having reduced delivery times for online orders from two days to one for its Prime loyalty program members, Amazon saw profit growth slow in the second quarter as earnings came in at $2.1 billion, or $4.23 per share, down from $2.9 billion a year ago, and badly missing expectations. Now that it has made the AmazonFresh grocery delivery service free for Prime members, profits potentially will be pressured even further.

Amazon is famous for forsaking profits for volume, but the grocery wars are different, and it looks more like Amazon is the one under pressure, being forced to build out an expensive physical footprint while forgoing profits, unlike its big retail rivals.

There may come a time that Amazon learns to navigate the analog retail ropes, but it has not yet proved capable. And with Walmart, Target, and others occupying the space, supermarkets don’t yet have to worry about a new grocery store from Amazon.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1,842.77.

The projected lower bound is: 1,734.58.

The projected closing price is: 1,788.68.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 54.6180. This is not an overbought or oversold reading. The last signal was a sell 1 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 53.49. 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 buy 65 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 67. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 19 period(s) ago.

Rex Takasugi – TD Profile

AMAZON COM closed down -7.570 at 1,788.200. Volume was 19% below average (neutral) and Bollinger Bands were 52% narrower than normal.

Open     High      Low     Close     Volume___
1,803.7601,805.9001,783.4801,788.200 2,651,086
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1,783.95 1,776.61 1,803.61
Volatility: 14 19 27
Volume: 3,297,139 3,047,618 3,833,135

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.

Summary

AMAZON COM is currently 0.9% below its 200-period moving average and is in an upward trend. Volatility is low 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 6 periods.

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