Amazon.com, Inc. (NASDAQ:AMZN) stock has been relatively weak in 2019, but investors shouldn’t worry about AMZN too much
Amid the big, broad rally in tech stocks in 2019, one not-so-insignificant factoid that has been largely swept under the rug is that the godfather of all tech stocks, Amazon (NASDAQ:AMZN), has actually been a laggard this year.
So far this year, Amazon stock is up 16%. That’s good. But it’s below average. The NASDAQ-100 is up nearly 17% in 2019.
Amazon’s 16% return in 2019 is also the second-weakest of the well-followed FAANG group, ahead of only Alphabet (NASDAQ:GOOG) . Apple (NASDAQ:AAPL) s up 19%, Facebook (NASDAQ:FB) has risen more than 20%. and Netflix (NASDAQ:NFLX) has jumped more than 30%.
Thus, both relative to all tech stocks and its big-tech peers, AMZN stock has under-performed in 2019.
Right now, it appears that Amazon stock is struggling to shake off the fact that the company’s e-commerce business is finally slowing down after multiple years of red-hot growth and aggressive market-share expansion.
Amazon’s e-commerce business has been showing signs of slowing and ceding market share for the past several months. For the longest time, the retail landscape was defined by Amazon gobbling up market share as its digital business grew at 20%-plus rates.
That is no longer the case today. The growth rates of the company’s digital business have dramatically cooled, and have been under 20% for several consecutive quarters. Meanwhile, the digital growth rates of companies like Walmart (NYSE:WMT) and Target (NYSE:TGT) are above 20% and accelerating higher, implying that traditional retailers are successfully taking back retail share from Amazon.
This isn’t great news for Amazon. AMZN became an $800 billion company largely because of its e-commerce business. Many investors thought that Amazon’s unparalleled dominance in the retail world would definitely continue for a long time. Actually, they believed that its growth wouldn’t slow until the global e-commerce market peaked.
But the company’s growth is slowing, and it’s slowing because competitors are fighting back and winning. Investors are naturally concerned about that, so they are consequently unwilling to bid Amazon stock back up to its highs.
Amazon stock has been hit in early 2019 by its e-commerce slowdown, and AMZN stock won’t return to being the market leader it once was until this headwind disappears.
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 1,653.72.
The projected upper bound is: 1,842.79.
The projected lower bound is: 1,651.18.
The projected closing price is: 1,746.99.
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 29 white candles and 21 black candles for a net of 8 white 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 89.8836. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 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 65.44. 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 55 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 7 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 5 period(s) ago.
Rex Takasugi – TD Profile
AMAZON COM closed up 29.790 at 1,742.150. Volume was 11% below average (neutral) and Bollinger Bands were 48% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,678.34 1,649.29 1,730.22
Volatility: 30 37 45
Volume: 4,427,099 5,108,140 5,627,279
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 0.7% 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 5 periods.