BrokersMinutes

Amazon Stock Set to Fill Price Gap? – August 26, 2014

By Forexminute - Jonathan Millet | Stock Tips | Aug 26, 2014 6:18AM BST




Amazon stock prices gapped down from the $360/share level to the $320/share area, leading to expectations of more weakness for the share price. However, it appears that Amazon stock prices bottomed out around the $310/share level before rebounding up to the 50 simple moving average.

MACD is reflecting a pickup in buying momentum, as the indicator is climbing again. At the moment, Amazon stock prices are stalling below the $340/share mark, which is within the vicinity of the 50 SMA, which could act as resistance for now. An upside break from consolidation could lead to a test of the next area of interest at the 200 SMA.

Amazon Stock Outlook

RSI is also headed higher, with the oscillator climbing above the 50.0 level, indicating a return of buying pressure. Gains for Amazon stock could last until the $350/share level in the near term while a selloff could take prices down to the previous lows below $300/share.

For now, the 50 SMA is moving below the longer-term moving average, which means that the path of least resistance is to the downside. News that the company is acquiring Twitch, a live-stream gaming network, hasn’t been very impressive for investors as the deal is almost at $1 billion.

Analysts have rated Amazon stock as a negative or hold, as the prospects for the company haven’t improved recently. According to analysts at TheStreetRatings, the revenue growth came in higher than the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 23.1%. This growth in revenue does not appear to have trickled down to the company’s bottom line, displayed by a decline in earnings per share.
The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry, reflecting weak prospects for Amazon stock.


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