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Amazon (AMZN) Shows Potential for Upward Movement amid Technical and Fundamental Analysis

StockInvest.us, 2 weeks ago

Amazon Technical Analysis

As of June 03, 2024, Amazon.com, Inc. (AMZN) closed at $178.34, reflecting a 1.08% increase from the previous trading day, with the trading range for the day falling between $175.92 and $178.70. The stock is presently in the oversold territory with an RSI14 of 27, indicating potential upward movement in the near term. The stock is trading below its 50-day moving average of $182.26 but remains above its 200-day moving average of $156.87, suggesting a mixed technical outlook.

The MACD (3-month) stands positive at 1.19, hinting at sustained bullish momentum. With an Average True Range (ATR) of 2.10, the stock shows moderate volatility. Immediate technical support is noted at $178.15, while resistance is nearby at $179.00. Given these indicators, potential upward movement for the next trading day (June 04, 2024) may be constrained unless strong new catalysts arise.

For the upcoming week, careful monitoring of resistance at $179.00 will be crucial. Breakthrough beyond this level could signal more bullish sentiment, while failure to maintain support at $178.15 might usher some short-term selling pressure.

Fundamental Analysis

Amazon has a robust market capitalization of $1.86 trillion, driven by its dominant position in e-commerce and cloud computing through AWS. The recent news underscores the company's ongoing investments in AI and expanding AWS capabilities, fostering long-term growth prospects. The P/E ratio stands at 50.1, signifying high valuation but possibly justifiable given its growth metrics.

Amazon The company’s earnings are set to be announced on August 01, 2024, which could provide further insights into its fiscal health. The EPS of 3.56 reflects consistent profitability, while the next earnings report will be pivotal in validating current market expectations.

Amazon's DCF valuation at 48.60 suggests the stock is trading significantly above its intrinsic value, indicating market optimism turning towards overvaluation. However, analyst consensus still places targets between a high of $270 and a low of $84, with a median of $200, reflecting overall bullish sentiment.

Long-term Investment Potential

The long-term potential of Amazon remains compelling, given its innovative strides in generative AI and ongoing expansion in AWS. Additionally, recent efficiency improvements in its e-commerce operations position the company for sustained profitability. However, investors should remain vigilant about high valuation levels as indicated by the DCF analysis.

Overall Evaluation

Considering the current technical and fundamental landscapes, Amazon.com, Inc. can be categorized as a 'Hold' candidate. While there are strong growth prospects particularly driven by AWS and AI developments, current technical indicators and overvaluation concerns advise caution. Investors already holding AMZN shares should consider monitoring upcoming earnings and market developments closely before making further decisions.

Check full Amazon forecast and analysis here.