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Amazon
Ticker: NASDAQ:AMZN
Price: $3175.11
Amazon Outlook
The e-commerce giant was one of, if not the biggest beneficiary of the pandemic. AMZN’s offerings are designed for the stay-at-home culture. Its core business of e-commerce was at the center of the online shopping wave. In the second quarter, AMZN’s revenue surged 40% year-over-year to $88.9 billion on the back of a huge surge in order volumes.
AMZN’s biggest win was its entry in grocery. Grocers were reluctant to go online. But the lockdown forced people to buy almost everything online. AMZN increased its grocery delivery capacity by over 160% to cater to the threefold surge in online grocery demand. The e-commerce giant also saw a 29% year-over-year surge in Amazon Web Services (AWS), as companies shifted their work to the cloud to facilitate remote working. Moreover, it saw a 29% uptick in its subscription services like Amazon Prime videos.
AMZN’s second-quarter EPS surged 97% to $10.3, surpassing the consensus estimate by 600%. This pandemic-driven demand boosted AMZN’s stock by 78% to its all-time high of $3,552.25. The online trend is here to stay. The company might see some pullback in demand, but the overall increase in revenue has become the new normal.
AMZN is in the right business at the right time. It has the resources to tap the digital trend in e-commerce, video on demand, and cloud services. Plus, the company has a strong competitive advantage to withstand a crash. .
Business Summary
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.
Price Performance
Relative Valuation
Technical Indicators
Overall, the bias in prices is: Upwards.
The projected upper bound is: 3,419.29.
The projected lower bound is: 2,947.59.
The projected closing price is: 3,183.44.
Candlesticks
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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 23 white candles and 27 black candles for a net of 4 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with AMAZON COM), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 20.6563. This is not an overbought or oversold reading. The last signal was a sell 4 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 45.25. 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 4 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 -92. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 3 period(s) ago.
Rex Takasugi – TD Profile
AMAZON COM closed down -93.500 at 3,175.110. Volume was 18% above average (neutral) and Bollinger Bands were 20% wider than normal.
Open High Low Close Volume 3,307.219 3,349.890 3,170.550 3,175.110 5,330,741
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 3,353.95 3,174.12 2,377.99 Volatility: 50 48 46 Volume: 5,231,203 5,040,264 4,842,565
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 is currently 33.5% 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 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 16 periods.
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