Amazon (NASDAQ:AMZN) stock — alongside the rest of the tech sector — has suddenly and sharply plunged in September, with shares falling nearly 20% in about three weeks.
To be sure, this rally was long overdue. AMZN stock was red-hot for a long time. Coming into September, the stock was up 90% year-to-date.
On the heels of such a large rally, Amazon stock was subject to profit-taking dynamics on any sort of weakness in the growth narrative. It’s no surprise that, amid broader weakness in the tech sector, Amazon stock is dropping.
But this sell-off has now come too far, and below $3,000, AMZN stock looks like a compelling buy on the dip.
Don’t overthink this one. Amazon is the world’s most innovative and arguably dominant company, with market-leading positions in multiple huge growth industries, like e-commerce and cloud.
Nothing about those fundamentals has changed over the past few weeks.
The AMZN stock price is just lower.
Long-term investors would be wise to ignore the noise and load up on this dip.
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: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 3,175.70.
The projected lower bound is: 2,735.66.
The projected closing price is: 2,955.68.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 20 white candles and 30 black candles for a net of 10 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 20.7645. This is not an overbought or oversold reading. The last signal was a buy 0 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 36.28. 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 11 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 -128.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 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 sell 10 period(s) ago.
Rex Takasugi – TD Profile
AMAZON COM closed up 5.560 at 2,960.470. Volume was 30% above average (neutral) and Bollinger Bands were 77% wider than normal.
Open High Low Close Volume 2,906.500 2,962.000 2,871.000 2,960.470 6,117,925
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 3,097.11 3,175.87 2,422.37 Volatility: 44 44 46 Volume: 5,624,948 4,992,836 4,931,838
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 22.2% 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 moderate flows of volume out of AMZN.O (mildly bearish). Our trend forecasting oscillators are currently bearish on AMZN.O and have had this outlook for the last 6 periods.
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