Amazon.com, Inc. (NASDAQ:AMZN) stock remains a growth story and one worth buying
Up 21% year-to-date with a market capitalization of over $903 billion and sitting as the third-largest company in the S&P 500, it’s often hard for Amazon.com (NASDAQ:AMZN) to tread lightly. In the rarefied air in which Amazon stock resides, it usually takes a lot to move the needle.
“A lot” meaning billions of dollars. Last year, the company had $233 billion in net sales, solidifying its status as one of the world’s biggest online retailers. Amazon Web Services (AWS), the company’s cloud computing business, is a multi-billion dollar unit and the list goes on. When Amazon speaks, it’s usually not softly and it’s usually with a big stick to paraphrase President Theodore Roosevelt.
That’s alright because, at least for traders with short-term time horizons, Amazon could use a little rejuvenating. Price action has been sluggish if not downright bad over the past couple of months, but that should not derail the thesis that Amazon stock is going back to $2,000 and beyond.
One of the primary reasons for the stock’s recent lethargy is that the company, along with rivals such as Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) and Facebook (NASDAQ:FB) are dealing with antitrust scrutiny.
Specific to Amazon, the company is dealing with regulators peering into speculation that the company’s marketplace search function turns up the most profitable items or Amazon-made brands first, potentially stymieing competitors’ offerings.
Bloomberg reported last week that a team of Federal Trade Commission investigators has begun interviewing small businesses that sell products on Amazon to determine whether the eCommerce giant is using its market power to hurt competition. according to the news agency.
Some big companies can and do draw the ire of regulators, and there’s no denying that related headlines can weigh on share prices as has been the case with Amazon stock.
However, among the reasons to stick buy Amazon stock are the company’s history of innovation, management knowing it’s Uncle Sam’s crosshairs and that it must nurture, not quell, competition on its marketplace.
“The traditional brick-and-mortar retail industry is undergoing a rapid transformation, particularly in commoditized categories,” said Morningstar in a recent note. “With nonexistent customer switching costs and intense competition, we’ve already seen Circuit City, Linens ‘n Things, Borders, and RadioShack exit the retail landscape, while Barnes & Noble, Sears, office superstores, and a host of other retailers struggle to reverse deteriorating fundamentals.”
That’s called the “Amazon effect” and the company could be looking to apply it in other industries, including streaming music. Amazon’s Amazon Music HD puts the company in competition with Apple and Spotify Technology (NYSE:SPOT), neither of which offer HD services.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1,888.54.
The projected lower bound is: 1,746.62.
The projected closing price is: 1,817.58.
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 19 white candles and 31 black candles for a net of 12 black candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
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.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 43.3366. This is not an overbought or oversold reading. The last signal was a sell 7 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 50.12. 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 30 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 26. This is not a topping or bottoming area. The last signal was a sell 4 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 22 period(s) ago.
Rex Takasugi – TD Profile
AMAZON COM closed up 4.040 at 1,821.500. Volume was 41% below average (neutral) and Bollinger Bands were 41% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,826.06 1,854.10 1,774.62
Volatility: 14 25 36
Volume: 2,566,080 3,314,104 4,564,454
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 2.6% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 8 periods.
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