Is Amazon is Setting Up for a Big Move?

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

AMZN – Amazon.com (AMZN) has been trading in a sideways range for almost a year. The stock has formed a key resistance level and a level of support. The stock is expected to either break through its resistance or fall through its support. Read more to learn how to take advantage of this trade.

Amazon.com Inc. (AMZN) is a leading online retailer and one of the highest-grossing e-commerce aggregators. The company’s offerings also include Amazon Web Services’ cloud computing, storage, database, advertising services, and co-branded credit cards.

The company has been gaining on more Prime subscriptions, which were driven by the coronavirus-led spike in online orders. In addition, AMZN is seeing strong adoption of AWS through expanding its AWS services portfolio. The company is also benefiting from its devices strategy as Alexa powered Echo devices are selling well.

AMZN has a solid balance sheet with a current ratio of 1.1 and a debt-to-equity ratio of 0.8. Management is also highly efficient with a return on equity of 26%. In the most recent quarter, earnings soared 215% year over year and sales jumped 43.8%. Analysts forecast a 29.5% year over year rise in sales and 19.10% rise in earnings for the current quarter.

AMZN is overvalued with a trailing P/E of 66.32 and a forward P/E of 58.48. The stock has shown mixed performance since last July as shown in the chart below.

Click Here to Read the Greatest Trading Book Ever Written

Take a look at the 1-year chart of AMZN below with added notations:

  Chart of AMZN provided by TradingView

AMZN has been trading in a large, sideways range for almost a year now. While in the range, the stock has formed a key resistance at $3350 (blue), and an area of support at around $2900 (red).  AMZN looks like it’s headed back to $3350, and a break through it most likely means another big leg higher is underway.

AMZN is trading within a range. The possible long positions on the stock would be either on a pullback to $2900 or on a breakout above $3350. The ideal short opportunity would be on a break below $2900.

Want to Discover More Great Trades?

I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don’t work at all.

That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!

5 WINNING Stock Chart Patterns

Have a good trading day!

Good luck!

Christian Tharp, CMT

@cmtstockcoach


AMZN shares fell $21.24 (-0.61%) in premarket trading Friday. Year-to-date, AMZN has gained 6.49%, versus a 12.17% 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

2022 Stock Market Outlook

The stock market (SPY) has continued on a bullish path in 2021. Will that continue in 2022? And what could happen to awaken the bear market from hibernation? 40 year investment veteran Steve Reitmeister explores this and more in this early edition of his 2022 Stock Market Outlook. Read on for full details below...

:  |  News, Ratings, and Charts

How Recent Bearish Sentiment Will Impact the Stock Market

Last week, the S&P 500 (SPY) fell during a short trading week. Multiple factors were weighing on investor sentiment. First was September's history for being a weaker month for stock performance. In addition, the previous week's August payrolls miss seemed to linger on investors' minds due to concerns that the delta variant of COVID was slowing the rebound in the economy. The real estate sector led declines as long-term interest rates increased. Consumer staples and utility stocks performed the best. In terms of market cap, the small-cap Russell 2000 Index underperformed the market after two strong weeks of outperforming the larger benchmarks. Growth stocks also outperformed Value stocks. I’ll discuss this and more below…

:  |  News, Ratings, and Charts

How to Turn Low Priced Stocks into BIG Winners?

Some investors are into growth stocks...some prefer value stocks while others are into momentum, income, chart patterns, insider trading and more. But one area that most investors agree upon is the great appeal in buying low priced stocks. Like those under $10 given the potential that prices soar and you easily beat the stock market (SPY). Read on to discover our brand new strategy for selecting low priced stocks that has led to a surprising +62.88% average annual return. Get the rest below...

:  |  News, Ratings, and Charts

3 Growth Stocks You Can Buy at a Reasonable Price

Even with growth stocks falling last week, investors are still pouring money into companies with strong growth potential. When you add in a value component, you get the best of both worlds. That's why investors should consider growth at a reasonable price stocks such as Westlake Chemical Corporation (WLK), ManpowerGroup (MAN), AutoNation, Inc. (AN).

:  |  News, Ratings, and Charts

How to Turn Low Priced Stocks into BIG Winners?

Some investors are into growth stocks...some prefer value stocks while others are into momentum, income, chart patterns, insider trading and more. But one area that most investors agree upon is the great appeal in buying low priced stocks. Like those under $10 given the potential that prices soar and you easily beat the stock market (SPY). Read on to discover our brand new strategy for selecting low priced stocks that has led to a surprising +62.88% average annual return. Get the rest below...

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