Amazon.com, Inc. (NASDAQ:AMZN) stock continues to astound

Amazon.com, Inc. (NASDAQ:AMZN) stock continues to astound

Amazon.com, Inc. (NASDAQ:AMZN) stock continues to astound

This time last year, I predicted that Amazon’s (NASDAQ:AMZN) business would continue to grow at a rapid pace, pushing AMZN stock all the way to $10,000.

Of course, I wasn’t suggesting it would happen immediately. Rather, it might take as long as 7.5 years to get there, which would still result in an annualized return of 33% for Jeff Bezos and company.

“In my estimation, if it took 7.5 years to get to $1,000 from $100, I see AMZN stock getting to $10,000 somewhere between January 2023 and January 2025.“

In September, the markets went into full-on bear mode, knocking the S&P 500 for a 14% loss, making it the worst quarter for the index since 2008, and in the process, putting it into negative territory (-7%) in 2018. Talk about a reversal of fortune.

How did AMZN stock fare in the fourth quarter? It lost 25% to close well down from its 52-week high of $2,050.50. No matter. Early in 2019, Amazon’s managed to regain some of those losses — it’s up 7.8% year-to-date through the Jan. 9 close.

Like a young child taking learning to walk, step by step, Amazon will get back on the path to $10,000. In fact, it needs only a couple of its big initiatives to be successful to reach the lofty goal sooner rather than later.

Here are two of them:

Amazon’s Push Into Advertising

When investors name-drop companies in online advertising, two names come to mind: Facebook (NASDAQ:FB) and Google, part of Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG).

Facebook and Google account for 58% of the U.S. online advertising market. Together, the two firms generated approximately $61 billion in ad revenue in 2018. Way down in third place with 7% market share of U.S. digital ad spending is Amazon — but it’s coming on like a house on fire. Forecasts suggest that Amazon ad revenues could hit $38 billion annually by 2023.

While Amazon has little chance of catching the duopoly that is Facebook and Google, it stands a good chance of becoming a strong third wheel.

“My understanding from speaking with people in the industry is that Amazon’s retail, subscription-based and advertising revenues are fairly fluid,” said Pivotal Research senior analyst Brian Wieser. “Amazon will optimize revenue streams and profitability based on what it sees from consumers.”

So while Facebook and Google are heavily dependent on advertising, Amazon has stuff like Amazon Web Services (AWS) — $5.1 billion in operating income in the first nine months of its latest fiscal year — that are highly profitable to lean on while building some of its other businesses such as advertising.

Jeff Bezos has become a master allocator of capital, stoking the fires that need stoking, and in the process, making Amazon extremely nimble and able to act on its best ideas.

Amazon Go

The cashier-less convenience store concept Amazon began rolling out in 2018 is going to revolutionize the industry. Amazon, which expects to open 3,000 stores by the end of 2021, could generate as much as $4.5 billion in annual sales from these stores in three years’ time. According to RBC Capital Markets, the average Amazon Go store does $1.5 million in annual sales.

Not bad for a store concept that doesn’t need any front-of-store personnel.

“Amazon Go stores could be a game changer for physical retail experience. Its in-store technology enables shoppers to have a very efficient and pleasant shopping experience,” RBC analyst Mark Mahaney wrote in a note to clients. “While not a significant financial contributor yet, we believe the overall opportunity is huge.”

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1,644.26.

The projected upper bound is: 1,809.91.

The projected lower bound is: 1,514.24.

The projected closing price is: 1,662.08.

Candlesticks

A white body occurred (because prices closed higher 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 26 white candles and 24 black candles for a net of 2 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 29.7881. This is not an overbought or oversold reading. The last signal was a sell 10 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 52.82. 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 27 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 -6. This is not a topping or bottoming area. The last signal was a sell 2 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 sell 6 period(s) ago.

Rex Takasugi – TD Profile

AMAZON COM closed up 25.500 at 1,658.810. Volume was 38% below average (neutral) and Bollinger Bands were 63% narrower than normal.

Open High Low Close Volume___
1,643.3401,665.2601,642.5001,658.810 4,453,105

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

Moving Averages: 10-period 50-period 200-period
Close: 1,650.48 1,604.23 1,719.90
Volatility: 53 60 46
Volume: 6,132,800 7,020,310 5,649,253

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 3.6% below 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 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 19 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