Amazon.com, Inc. (NASDAQ:AMZN) revenue growth will remain robust
Amazon (NASDAQ:AMZN) stock has been trading sideways for the past year. I strongly believe that AMZN stock is in a consolidation zone ahead of its next rally.
I am examining the long-term outlook of AMZN stock, and my upbeat view is supported by the company’s growth potential. In this column, I will discuss the factors that can trigger sustained top-line growth by Amazon.
Before talking about AMZN’s growth triggers, I want to point to an interesting trend in the retail industry. Companies like Walmart (NYSE:WMT) and Target Corporation (NYSE:TGT) are investing in expanding their online presence. On the other hand, AMZN is gradually building more brick-and-mortar stores. A key conclusion from these trends is that the retail sector’s online and brick-and-mortar-store segments are both growing.
Amazon Stock Can Be Boosted by U.S. Growth
When I last discussed AMZN stock, my focus was on the company’s growth outlook in India and Southeast Asia. However, AMZN can still grow further in developed markets.
According to the U.S. Census Bureau, in the second quarter of 2019, 10.7% of total retail sales were e-commerce transactions, up from 9.8% a year earlier. Therefore, e-commerce’s share is increasing, but online sales are still low compared to the sales of brick-and-mortar stores.
I believe Amazon’s market share will rise in coming years due to the following factors:
Amazon is working on differentiating ideas that will make consumers happier. As an example, the company’s “Amazon Go” brick-and-mortar stores have eliminated the need to wait on lines to pay. That will reduce the time needed to shop. As an article from Harvard Business Review suggests, analysts view AMZN as one of the most consumer-centric companies. This focus will help Amazon grow and differentiate itself from its peers.
An article on InvestorPlace, written by Rohit Chhatwal, discusses Amazon‘s increasing shipping costs and their impact on the company’s profit margin. I believe that the company’s brick-and-mortar stores will help reduce its shipping costs.
In June 2019, the company introduced pick-up points at more than 100 Rite Aid (NYSE:RAD) stores in the United States. By the end of 2019, the plan is to increase the number of pick-up points to over 1,500.
Similarly, the creation of Amazon Hub Locker+ is another strategy that will reduce the company’s shipping costs. Besides reducing costs, these pick-up points will enable consumers to obtain the products they ordered more quickly. As a result, demand for Amazon’s products will increase and its sales growth will accelerate.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1,809.78.
The projected upper bound is: 1,806.22.
The projected lower bound is: 1,663.17.
The projected closing price is: 1,734.69.
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.
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 58.3698. This is not an overbought or oversold reading. The last signal was a buy 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 44.30. 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 47 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 24. This is not a topping or bottoming area. The last signal was a buy 6 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 1 period(s) ago.
Rex Takasugi – TD Profile
AMAZON COM closed up 4.510 at 1,736.430. Volume was 41% below average (neutral) and Bollinger Bands were 22% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,726.17 1,780.52 1,789.14
Volatility: 16 25 29
Volume: 2,745,632 3,195,602 4,142,315
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 is currently 2.9% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of AMZN.O (mildly bearish). Our trend forecasting oscillators are currently bearish on AMZN.O and have had this outlook for the last 11 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.
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