Amazon.com, Inc. (NASDAQ:AMZN) new grocery stores will be a positive catalyst for AMZN stock

Amazon.com, Inc. (NASDAQ:AMZN) new grocery stores will be a positive catalyst for AMZN stock

Amazon.com, Inc. (NASDAQ:AMZN) new grocery stores will be a positive catalyst for AMZN stock

When Amazon (NASDAQ:AMZN) bought Whole Foods Market about a year ago, the major grocery chains shuttered in disbelief and their stocks retreated. After all, when AMZN sets its sights on you, the results are usually not too good.

And over the last year or so, many grocery chains have had to fight hard to keep their sales growing as their margins continue to collapse.

But it turns out that Amazon isn’t done hitting the grocery store chains where it hurts. In fact, it plans to squeeze them a bit more.

Rumors and news have begun to swirl that Amazon is working not only on opening more physical grocery stores to serve as delivery bases, but that it’s also working hard on entering one of the most profitable niches for grocery stores: health and beauty products.

That’s another example of how AMZN plans to dominate all the parts of the retail landscape. For the grocery stocks, it’s another cautionary tale.

Amazon continues to excel at developing its grocery business. The idea of it opening a new type of store across the country is very exciting indeed. The move will provide it with plenty of market data and the ability to attract more customers into its Prime system, while creating a new, same-day distribution network.

That’s all great for AMZN stock. It’s not so great for KR or the other major grocery chains or for grocery stocks.

In the end, the grocery chains will have to spend some serious coin to catch up with AMZN and keep it  from eliminating whatever margins they have left. That doesn’t provide me with a lot of confidence in grocery stocks going forward.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 1,657.62.

The projected upper bound is: 1,856.78.

The projected lower bound is: 1,674.38.

The projected closing price is: 1,765.58.

Candlesticks

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 29 white candles and 21 black candles for a net of 8 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 87.2305. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 67.85. 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 56 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 190.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 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 6 period(s) ago.

Rex Takasugi – TD Profile

AMAZON COM closed up 19.700 at 1,761.850. Volume was 4% above average (neutral) and Bollinger Bands were 39% narrower than normal.

Open High Low Close Volume___
1,753.5101,784.1601,753.5101,761.850 6,364,161

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1,685.28 1,653.02 1,730.88
Volatility: 30 35 45
Volume: 4,695,363 5,051,772 5,643,268

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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
AMAZON COM is currently 1.8% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into AMZN.O (mildly bullish). Our trend forecasting oscillators are currently bullish on AMZN.O and have had this outlook for the last 6 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH