Amazon.com, Inc. (NASDAQ:AMZN) stocks up on Chinese products as coronavirus disrupts supplies

Amazon.com, Inc. (NASDAQ:AMZN) stocks up on Chinese products as coronavirus disrupts supplies

Amazon.com, Inc. (NASDAQ:AMZN) stocks up on Chinese products as coronavirus disrupts supplies

As the coronavirus outbreak in China continues to plague local manufacturing businesses, the world’s largest online marketplace is taking precautions.

Amazon placed off-cycle orders with some of its suppliers last week to increase inventory of Chinese-made products as it “prepare[s] for possible supply chain disruptions due to recent global events originating in China,” according to an internal email obtained by Business Insider.

The news comes after Amazon told Reuters in the same week that its operation has not been interrupted by the virus that has lead to the deaths of more than 1,000 people and infected upwards of 43,000.

Since then, Amazon has confirmed that the order was a cautionary move.

At least 40 percent of sellers on Amazon’s U.S. marketplace are based in China. But many Chinese factories have been unable to resume production after the Lunar New Year holidays, as workers across China have been unable or unwilling to return to work due to travel restrictions and local law enforcement practices. Manufacturers, too, have struggled to reach suppliers and provide face masks for workers according to national mandates.

Anticipating shortages, Amazon has been placing orders with first-party suppliers to stock up on several weeks of supply for Chinese products— even offering suppliers extra shipping time and “proactively waiving” late-shipment fees for them.

To “ensure shopper experience and seller account performance,” Amazon also published advice on its Chinese website Saturday for third-party sellers bracing for the market impact of the coronavirus outbreak.

Technical Indicators

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 1,915.04.

The projected upper bound is: 2,243.68.

The projected lower bound is: 2,071.21.

The projected closing price is: 2,157.45.

Candlesticks

A black body occurred (because prices closed lower 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.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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 rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 5 rising windows in the last 50 candles–this makes the current rising window even more bullish.

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 85.2262. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 17 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 80.76. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 26 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 119.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 9 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 7 period(s) ago.

Rex Takasugi – TD Profile

AMAZON COM closed up 16.890 at 2,150.800. Volume was 69% above average (neutral) and Bollinger Bands were 218% wider than normal.

Open     High      Low     Close     Volume___
2,150.9002,185.9502,136.0002,150.800 5,746,011
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 2,024.54 1,867.58 1,840.52
Volatility: 40 29 26
Volume: 5,864,127 3,798,597 3,539,528

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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
AMAZON COM is currently 16.9% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 35 periods. Our momentum oscillator is currently indicating that AMZN.O is currently in an overbought condition.

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