Amazon.com, Inc. (NASDAQ:AMZN) Prime Subscriptions Grow

Amazon.com, Inc. (NASDAQ:AMZN) Prime Subscriptions Grow

Amazon.com, Inc. (NASDAQ:AMZN) Prime Subscriptions Grow

Just as Costco (NASDAQ: COST ) enjoys high profit margins through membership fees, Amazon Prime is of strategic importance. Last year, more people signed up for Prime than any year before. The more time people spend watching videos and listening to music, the more they are likely to renew their membership year after year. Telling friends about the great service encourages more people to sign up.

When Amazon Web Services brought in an astonishing $30 billion in annualized revenue, the company’s credit card initiative appears insignificant at best.

Yet everything counts; the operating margin grew by 320 basis points. It may re-invest the cash to fulfill infrastructure needs while finding further efficiencies. The more profitable the business becomes the better programs like Prime get. And the more incentive there is, the more likely Amazon may win customers who happen to have bad credit and need to rebuild their credit score.

Price Target

Analysts on Wall Street have an average price target that is 20% above the recent $1,860 share price. Per Tipranks, the average price target is $2,242 . Supporting this price target is a 10-year DCF Growth Exit Model . If Amazon keeps growing revenue by at least 10% annually, the stock has plenty of upside for investors.

Amazon’s high valuations do not make much sense to the conservative investor but the market knows better. In every type of business, the online retailer enters, it re-defines the business process and eventually dominates the sector.

Your Takeaway

Shares of Amazon stock are already up nearly 10% in the last week thanks to a rebound in the stock market. Though the growth prospects suggest the stock may run higher, investors may still want to wait for a dip in the stock before buying.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1,939.95.

The projected lower bound is: 1,772.33.

The projected closing price is: 1,856.14.

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 22 white candles and 28 black candles for a net of 6 black candles.

An on-neck line occurred. This is a bearish pattern where prices should move lower when the white candlestick’s (i.e., the most recent) low is penetrated.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 83.1600. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 54.42. 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 6 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 83. This is not a topping or bottoming area. The last signal was a sell 0 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 2 period(s) ago.

Rex Takasugi – TD Profile

AMAZON COM closed down -8.380 at 1,855.320. Volume was 38% below average (neutral) and Bollinger Bands were 38% wider than normal.

Open High Low Close Volume___
1,853.9801,865.0001,844.3801,855.320 2,678,335

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

Moving Averages: 10-period 50-period 200-period
Close: 1,789.02 1,856.03 1,750.13
Volatility: 43 29 46
Volume: 4,737,284 4,297,528 5,670,802

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 6.0% above its 200-period moving average and is in an downward 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 bearish on AMZN.O and have had this outlook for the last 21 periods.

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