Sign InAmazon Stock Shows Resilience and Short-Term Bullish Momentum, Rated as a Buy
Summary
As of September 19, 2023, Amazon.com (AMZN) stock closed at $137.63, down 1.68%, but despite this dip, the stock shows resilience with technical indicators suggesting short-term bullish momentum and analyst consensus rating it as a Buy with potential for significant upside, although regulatory risks should be considered.
Technical Analysis
As of the close on September 19, 2023, Amazon.com, Inc. (AMZN) stock closed at $137.63, down 1.68% from the previous trading day. Despite this drop, the stock exhibits a fair amount of resilience, trading above both its 50-day and 200-day moving averages of $135.11 and $111.44 respectively.
The stock's 14-day Relative Strength Index (RSI) is 55, which puts the stock in a neutral territory, not in overbought or oversold conditions. However, with a Moving Average Convergence Divergence (MACD) of 1.01, the stock is exhibiting short-term bullish momentum over the past three months.
The stock's average true range (ATR) comes in at 2.45 indicating a heightened level of volatility, and the stop-loss level has been set at $131.44, offering a protective measure for downside risk.
The technical levels show a support level at $135.36 and a resistance level at $137.85. With the last close price of $137.63 being near the resistance level, it might be expected a test of this level in the next trading day.
Fundamental Analysis
AMZN currently has a relatively high P/E ratio of 112.81, reflecting investor expectations of high future earnings. The EPS stands at $1.22. Given the high P/E ratio, the EPS indicates that the company is currently profitable.
The company's market capitalization is $1.42 trillion, reflecting a strong market presence. AMZN's trading volume of 59.09 million was above its average volume of 53.56 million, indicating notable investor interest and activity in the stock.
Amazon.com's latest news indicates a promising outlook in the short-term. The company's plan to hire an additional 250,000 employees for the holiday season shows strong anticipation of increased demand. Moreover, the company's move to increase its average hourly pay for certain employees is a positive sign, potentially indicating increased profits and revenue.
However, a crackdown from the Federal Trade Commission (FTC) could put a damper on these growth prospects. The commission's push for increased regulation is a concern, as it may limit Amazon's ability to deploy competitive practices and could potentially impact long-term innovation.
Stock Outlook and Rating
Based on the consensus of 40 analysts, AMZN is rated as a "Buy" with 37 recommending a 'Buy', three recommending a 'Hold', and none recommending a 'Sell'. The target high price is $270, the target low is $103, the target consensus price is $166.13, and the target median price is $167. All these targets suggest potential for significant upside from the current closing price.
Considering both technical and fundamental perspectives alongside current market conditions and prevailing analyst consensus, AMZN is rated as a "Buy." This rating is predicated on the company's robust growth prospects indicated by the planned hiring spree and increasing pay for employees, the positive technical signs of resilience and short-term bullishness, as well as the potential for significant upside indicated by the analyst consensus.
For the next trading day, September 20, 2023, the stock price might test the resistance level of $137.85 given the short-term bullish momentum. In the upcoming week, with the current bullish signs and anticipation of increased demand for the holiday season, the price could move closer to the consensus target price of $166.13. However, it's important to stay mindful of potential regulatory risks and market volatility.
