Is Amazon Headed for a Breakdown?

NASDAQ: AMZN | Amazon.com, Inc. News, Ratings, and Charts

AMZN – A trendline level of support has formed in the chart of Amazon.com Inc. If the stock breaks the trendline, lower prices are expected. Read more to learn how to profit from this trade.

Amazon.com Inc. (AMZN) is a leading online retailer and one of the highest-grossing ecommerce aggregators. In addition to retail, offerings include Amazon Web Services’ cloud computing, storage, database, advertising services, and co-branded credit cards.

The company has been gaining momentum in its Prime service due to fast delivery and a strong content portfolio. AMZN is also seeing growth in its online stores sales and solid adoption in AWS. Momentum in Amazon Music is also driving growth.

As of the most recent quarter, the company had a whopping $89.9 billion in cash, up from $73.3 billion the previous quarter. Its current ratio of 1.2 indicates it has more than enough liquidity to handle short-term obligations leading to a Quality Grade of B in our POWR Ratings system.

From a growth standpoint, earnings have grown an average of 67.3% per year over the past five years. Analysts forecast earnings to rise 26.4% this year. Its stock looks overvalued with a trailing P/E of 60.29. The stock has shown mixed performance over the past year as shown in the chart below.

Take a look at the 2-year chart of AMZN below with the added notations:

Chart of AMZN provided by TradingView

Over the past several months, AMZN formed a trendline level of support (blue) which has also become the “neckline” (blue) for the stock’s head and shoulders (H&S) reversal pattern. Confirmation of the H&S would occur if AMZN breaks the trendline, and lower prices would be expected from there. In that scenario, the $2900 mark (green) would be the first target. Short trades could be entered if the stock were to break the neckline, with a protective stop placed above the point of entry.

Click Here to Read the Greatest Trading Book Ever Written

Want to Discover More Great Trades?

What is better than finding the 1 attractive stock in this article?

Discovering 5 timely trades…like the ones in this new special report. Click below to claim your free copy now!

5 Stocks Ready to BREAKOUT!


AMZN shares fell $18.00 (-0.56%) in premarket trading Wednesday. Year-to-date, AMZN has declined -1.88%, versus a 15.82% rise in the benchmark S&P 500 index during the same period.


About the Author: Christian Tharp


I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
AMZNGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

10 Best POWR Ratings Stocks

Investors love using our POWR Ratings to track down stocks likely to outperform the S&P 500 (SPY). However, on any given day there are over 1,300 that are Buy rated. This leads customers to reach out to us to discover which are the BEST of these stocks. Today I share the answer including details on the current 10 best POWR Ratings stocks. Get the rest below...

:  |  News, Ratings, and Charts

Are Stocks Ready to Break to New Highs?

The stock market (SPY) is on a 5 day winning streak and now less than 1% away from the all time highs. This quickly shakes off weeks of painful pullbacks and volatility. Is the market truly ready to ascend to new heights or is this another fake out before the next leg lower? Find out the rest below...

:  |  News, Ratings, and Charts

TTSH is this Week’s Featured Stock 

The Tile Shop Holdings (TTSH) is a leading specialty retailer of manufactured and natural stone tiles. The company has staged an impressive earnings turnaround. Read more to find out why the stock is a good buy into year-end.

:  |  News, Ratings, and Charts

Buy These 3 Tech Stocks Before They Soar Further

Tech stocks, which were underperformers at the start of the year, have made their way back as investors have been buying on the dip. Many of these stocks, which include Applied Materials Inc. (AMAT), KLA Corporation (KLAC), and Amdocs Limited (DOX) are currently in an uptrend and are expected to continue this momentum.

:  |  News, Ratings, and Charts

TTSH is this Week’s Featured Stock 

The Tile Shop Holdings (TTSH) is a leading specialty retailer of manufactured and natural stone tiles. The company has staged an impressive earnings turnaround. Read more to find out why the stock is a good buy into year-end.

Read More Stories

More Amazon.com, Inc. (AMZN) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All AMZN News