Will the 2020s See Amazon.com, Inc. (NASDAQ:AMZN) Lending Back on Track?

Will the 2020s See Amazon.com, Inc. (NASDAQ:AMZN) Lending Back on Track?

Will the 2020s See Amazon.com, Inc. (NASDAQ:AMZN) Lending Back on Track?

Few businesses have been able to create consumer ecosystems as broad as those produced by Amazon. The interconnectedness of its products and services keeps the consumer within the tech giant’s orbit, and it gives them little reason to explore other options.

However, while Amazon has become revered in the media for having a Midas touch in business, perhaps overly so, it’s worth noting that it does not get everything right. And, we can highlight a particular case in the shape of Amazon Lending.

Launched in 2011, it seemed like Amazon Lending would be an ‘easy win’ for the company. After all, it had a ready base of customers and their data and spending habits already in its ecosystem. As the number of Amazon customers swelled throughout the decade, one would expect to see massive growth in Amazon Lending. It didn’t happen.

Amazon decides to reboot lending operations

Well, we say it didn’t happen. Amazon saw modest growth in this area, but not Amazon-level growth, the kind of spectacular results that saw the company become a darling of financial media reporting.

One possible reason for its sluggishness was that by the standard of Big Tech, Amazon Lending wasn’t particularly innovative or appealing. Annual loans were typically offered at between 6% and 17%, but there are other options for funding that are much more attractive to businesses and individuals.

Moreover, the product wasn’t exactly consumer-facing. There isn’t, for example, a dedicated Amazon Lending website, and one would argue that much of its business loan operations were targeted at sellers on the Amazon marketplace. In fact, one could almost describe Amazon’s loans business as secretive.

Towards the end of the decade, Amazon Lending reportedly started to shed staff and scale back operations in countries like Japan. The speculation was that Amazon was taking stock of the risks and rewards of the loans business.

Suggestions that tech giant wants to disrupt current models

But things move fast in the world of Big Tech, and we know that Amazon is insatiable in its quest for growth. Recently, the company has been on a recruitment drive across America, Europe and Asia. Again, we have scant details on what Amazon’s vision for its rebooted loans business might be, but as reported by the Financial Times, potential recruits were asked questions like, “Are you interested in helping us disrupt an entire industry?”

A line like that might not be enough to consider Amazon’s resurgence in the loans market a sure thing. And, observers will be acutely aware that corporate-speak of ‘disrupting an entire industry’ should be taken with a grain of salt. Indeed, often such grandiose statements turn out to be harbingers of dullness.

But then again, this is Amazon, and that means we can expect the spectacular more often than not. The company is recalibrating its presence in the loans market in a time of rapid change, and at a time when there are already many new disruptors in the market. If Amazon Lending is to succeed in its second coming, we would argue that it needs to bring something innovative to the table, and not just rely on its considerable clout.

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 1,817.07.

The projected upper bound is: 1,959.75.

The projected lower bound is: 1,847.31.

The projected closing price is: 1,903.53.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

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 76.3562. This is not an overbought or oversold reading. The last signal was a sell 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 66.69. 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 90. This is not a topping or bottoming area. The last signal was a sell 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 buy 15 period(s) ago.

Rex Takasugi – TD Profile

AMAZON COM closed up 9.080 at 1,901.050. Volume was 3% above average (neutral) and Bollinger Bands were 95% wider than normal.

Open     High      Low     Close     Volume___
1,909.8901,917.8201,895.8041,901.050 3,174,962
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,880.90 1,793.64 1,830.24
Volatility: 32 20 24
Volume: 4,109,020 3,015,582 3,477,826

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 3.9% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 13 periods.

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