Sign InAmazon Stock Outlook: Bullish Technical Analysis Indicates Potential Upside
Summary
Despite closing at a slightly lower price on June 28, 2023, Amazon's stock shows positive indicators such as a bullish MACD and a DCF value slightly higher than the current price, suggesting a potential price adjustment and long-term growth, making it a Hold for short-term investors and a Buy for mid-long term investors.
Technical Analysis
Amazon.com, Inc. (AMZN) closed its last trading day (June 28, 2023) at $129.04, a decrease of -0.11%, underperforming the NASDAQ exchange. Its 52-week range stands between $81.43 and $146.57, implying that the current stock price is closer to the 52-week high level.
Trading at 11.64% higher than its 50-day moving average of $115.57, and 23.83% above its 200-day moving average of $104.26, AMZN indicates a positive trend. The MACD (a trend-following momentum indicator) for the past three months is recorded as 4.09, showing a bullish signal.
Relative Strength Index (RSI), a momentum oscillator that measures the speed and change of price movements, stands at 69. This value is close to the overbought threshold, suggesting a potential upcoming price adjustment.
Fundamental Analysis
Amazon has a hefty market capitalization of $1.32 trillion. In terms of PE ratio, the company's valuation seems high at 293.27, indicating a premium compared to the average PE ratio of most companies in the NASDAQ exchange. Amazon's EPS was recorded at $0.44, which portrays positive earnings.
The average daily trading volume stands at 63.10 million shares, while it traded a lesser 49.33 million shares on June 28, 2023. This suggests a less active market for this stock on that day.
The Discounted Cash Flow (DCF) is $134.33, slightly more than the current stock price, hinting that the stock might be undervalued.
Looking at the analyst consensus, the target ranges from a low of $97.78 to a high of $270, with a median of $159.50 and consensus at $161.55. These figures suggest a potential upside from the current price.
Recent News and Predictions
Recent news highlighted Amazon's potential to rise to $200/share due to growth in services such as cloud, AI, advertising, and the Prime subscription service. This optimistic outlook could boost the company's market capitalization near the $2 trillion mark.
Furthermore, the company's concerted efforts to augment its autonomous driving space and Prime offerings for business customers are notable strategic advances.
However, a bear case suggests a possible drop to a range of $80-100/share if Amazon Web Services' growth falls short of expectations.
Recommendation
Considering the technical and fundamental indicators and recent company-specific news, there is a potential for a short-term price adjustment due to the high RSI but an overall mid-long term positive outlook based on the DCF, EPS, bullish MACD, and recent strategic growth plans.
Based on this analysis, Amazon's stock is expected to trend up over the next trading day and week, with a price closer to the DCF value. Therefore, AMZN is rated as "Hold" for short-term investors considering the high RSI, and "Buy" for mid-long term investors considering the prospects for growth and potential upside against the current stock price.
