Sign InAmazon Stock Shows Bullish Momentum with Potential Upside as Analysts Favor 'Buy' Recommendations
Summary
As of November 19, 2024, Amazon.com, Inc. (NASDAQ: AMZN) shows promising momentum with a closing price of $204.61, approaching its resistance level at $207.09 amid bullish trends reflected in a solid market capitalization of $2.15 trillion and favorable analyst projections, although cautious investment strategies are recommended given the current market volatility.
Technical Analysis
Amazon.com, Inc. (NASDAQ: AMZN) closed on November 19, 2024, at $204.61, reflecting a 1.44% increase from the previous day. The stock traded between $198.80 and $205.30, indicating a favorable movement towards its resistance level at $207.09. With a 14-day Relative Strength Index (RSI) standing at 60, the stock is approaching overbought territory but still presents room for upward movement.
The 50-day and 200-day moving averages are $192.19 and $183.36, respectively, showing a bullish trend. The MACD of 7.14 also supports a positive momentum, while the Average True Range (ATR) of 2.58 suggests moderate volatility. Volume was slightly below average, at 30.85 million compared to a 37.41 million average, indicating less trading activity than usual. The stop-loss suggests protective support at $194.96.
Fundamental Analysis
From a fundamental perspective, Amazon reported a substantial market capitalization of $2.15 trillion. Its price-to-earnings (PE) ratio is 43.72, suggesting that the stock may be favorably priced against future earnings growth expectations, especially within a robust technology market realm. The earnings per share (EPS) of $4.68 and a discounted cash flow (DCF) analysis pointing to $51.26 illustrate intrinsic value that frames the stock as significantly undervalued.
Recent analyst targets imply a consensus value of $208.49, closely aligned with the current trading level. The high target is at $270, showing potential appreciation, whereas the low sits at $103, indicating risk. The majority analyst prediction is a 'Buy,' with 46 buys and 4 holds, highlighting strong confidence in the stock's performance.
News Impact
Recent news notes that Amazon shares are correcting slightly after significant 2024 gains, positioning the stock as an appealing opportunity for both new and existing investors. Despite some strategic selling from prominent investors like Izzy Englander, there is recognition of Amazon’s robust Q3 results, which featured solid EPS and revenue performances. This correction phase aligns with buy-side strategies, as mentioned in investor sentiment focusing on strategic options selling for potential discounted share purchasing and yield maximization.
Short-term Prediction
For the next trading day, November 20, 2024, and the upcoming week, AMZN is likely to continue moderate bullish movement, potentially testing the resistance at $207.09. Volatility may remain within the ATR, providing some price fluctuations, though strong support is evident at $202.61.
Long-term Investment Potential
Amazon’s long-term intrinsic value, outlined by its DCF, and ongoing bullish trend, coupled with favorable market positioning, suggest solid long-term investment potential. Although setbacks like the AI-powered Alexa initiative indicate execution challenges, the growth strategy underpins future value.
Overall Evaluation
AMZN is evaluated as a 'Hold.' The current positioning at the resistance level indicates potential for upside post-correction, contingent on market reactions and strategic company maneuvers. However, volatility and external competitive factors justify a cautious stance until profitability ratios align more closely with technological developments and broader market expansions.
