Amazon.com, Inc. (NASDAQ:AMZN) plans to move from free two-day shipping to one-day shipping for Prime members

Amazon.com, Inc. (NASDAQ:AMZN) plans to move from free two-day shipping to one-day shipping for Prime members

Amazon.com, Inc. (NASDAQ:AMZN) plans to move from free two-day shipping to one-day shipping for Prime members

At roughly the same time Amazon (NASDAQ: AMZN) quietly let it be known that it plans to move from free two-day shipping to one-day shipping for Prime members, the company dropped another bombshell. The e-commerce giant took its freight brokerage platform live at freight.amazon.com.

That’s not a move the company did much to promote. In fact, there’s no press release on the company’s website nor did it have a media event to trumpet its efforts.

Not playing up major news seems to be part of CEO Jeff Bezos’s playbook. That does not make the beta launch of Amazon’s freight service in Connecticut, Maryland, New Jersey, New York, and Pennsylvania any less epic, however.

What is Amazon doing?

The company is leveraging its own shipping brokerage capabilities to sell those services to other companies. It’s going to do that through its online brokerage platform at prices that will undercut current market pricing by 26-33%, according to Freightwaves.com, which broke the news of the launch.

This isn’t Amazon selling capacity on its own vehicles. Instead, it’s brokering access to its trucking network. In its launch version, the online retailer is offering access to 53′ dry van full truckload freight service without marking it up.

Basically, Amazon is locking up trucking capacity by brokering those services without making any money. It’s not asking trucking companies to operate at a discount (at least beyond whatever discount they already give the online retailer) and that leaves Amazon lots of room to raise prices down the line (while still being much cheaper than what’s currently being charged).

“Amazon already moves an enormous amount of freight through its distribution and sortation centers and has an extensive network of trucking carriers,” wrote FreightWaves’ John Paul Hampstead. “For many industry observers, it was only a matter of time before Amazon leveraged the implicit network effect — the total number of shippers and carriers who do business with Amazon — and connected both sides of its business.”

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 1,788.73.

The projected upper bound is: 2,017.62.

The projected lower bound is: 1,896.07.

The projected closing price is: 1,956.84.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

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 79.6131. 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 76.51. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 5 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 156.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 11 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 3 period(s) ago.

Rex Takasugi – TD Profile

AMAZON COM closed up 48.380 at 1,950.630. Volume was 100% below average (consolidating) and Bollinger Bands were 28% narrower than normal.

Open High Low Close Volume___
1,929.0001,951.0001,898.0001,950.630 593

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

Moving Averages: 10-period 50-period 200-period
Close: 1,884.32 1,755.58 1,748.93
Volatility: 20 22 45
Volume: 3,331,658 4,005,094 5,650,450

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 11.5% 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 33 periods. Our momentum oscillator is currently indicating that AMZN.O is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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