Amazon caused quite a stir yesterday by launching its own online pharmacy.
Pharmacy stocks all suffered; Walgreens was the worst performer in the Dow and the S&P 500, down nearly 10%. CVS fell more than 8%. Drug distributors like Cardinal Health and McKesson were down more than 5%. And GoodRX, which only IPO’d a couple of weeks ago, plunged 22%.
That’s because Amazon isn’t just launching a pharmacy, it’s also launching a discount card that can be used at some 50,000 locations, including Walgreens and CVS. As Raymond James analyst John Ransom noted, “At the time of the [GoodRX] IPO, the narrative was that Amazon wouldn’t be a near-term competitor because pharmacies would be reluctant to work with them. This clearly changes that narrative.”
Still, it’s a “double negative” for the drug retailers, Ransom said, because it means (1) more people with discount cards, and (2) more mail order/online competition. It feels to me like the drugstores are hedging their bets; partnering with Amazon on the discount cards could increase foot traffic for now even as Amazon starts shifting more of the pharma business online longer-term.
Perhaps Amazon knows word-of-mouth is its most powerful marketing tool anyhow; make Prime Now, or pharma delivery, or discount cards good enough and people will eventually figure it out. So long as they have the bandwidth internally to dedicate to all of these different initiatives, I wouldn’t bet against them.
Amazon.com, Inc. offers a range of products and services through its Websites.
The Company’s products include merchandise and content that it purchases for resale from vendors and those offered by third-party sellers. It also manufactures and sells electronic devices.
It operates through three segments: North America, International and Amazon Web Services (AWS). Its AWS products include analytics, Amazon Athena, Amazon CloudSearch, Amazon EMR, Amazon Elasticsearch Service, Amazon Kinesis, Amazon Managed Streaming for Apache Kafka, Amazon Redshift, Amazon QuickSight, AWS Data Pipeline, AWS Glue and AWS Lake Formation.
AWS solutions include machine learning, analytics and data lakes, Internet of Things, serverless computing, containers, enterprise applications, and storage. In addition, the Company provides services, such as advertising.
It also offers Amazon Prime, a membership program that includes free shipping, access to streaming of various movies and television (TV) episodes.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 3,112.12.
The projected upper bound is: 3,346.19.
The projected lower bound is: 2,858.21.
The projected closing price is: 3,102.20.
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 24 white candles and 26 black candles for a net of 2 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 55.7994. 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 46.20. 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 sell 53 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 -20. This is not a topping or bottoming area. The last signal was a buy 5 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 sell 6 period(s) ago.
Rex Takasugi – TD Profile
AMAZON COM closed down -30.200 at 3,105.460. Volume was 100% below average (consolidating) and Bollinger Bands were 22% narrower than normal.
Open High Low Close Volume 3,134.000 3,140.000 3,105.100 3,105.460 1,508
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 3,156.08 3,163.84 2,701.31 Volatility: 46 49 50 Volume: 4,397,362 5,191,127 5,210,867
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 15.0% above its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on AMZN.O and have had this outlook for the last 6 periods.