Sign InSummary
Amazon's stock (AMZN) closed at its highest price in the past year, signaling strong bullish momentum and positive technical indicators, making it a 'Buy' for investors with a moderate to high-risk tolerance and a focus on long-term growth. (Analysis conducted on November 24, 2023)
Technical Analysis
Amazon.com, Inc. (AMZN) recently closed at $146.71, which is the highest it's been in the past year, signaling strong bullish momentum. The technical indicators, coupled with the move, are leaning on the positive side. The Relative Strength Index (RSI) at 67 is approaching the overbought threshold of 70, suggesting high buyer interest. However, this may also indicate that the stock could see a short-term pullback if it crosses into overbought territory.
The stock's performance relative to its moving averages also provides insights. AMZN is trading well above its 50-day moving average ($133.87) and its 200-day moving average ($121.01). This confirms a solid uptrend in the medium and longer term. The Moving Average Convergence Divergence (MACD) of 6.48 is positive, which supports the bullish trend.
The Average True Range (ATR) stands at $2.47, showing a moderate level of volatility. With no immediate resistance level in sight due to the stock reaching year highs, the next trading day could see continuation if the bullish momentum persists. The stock's support is at $140.39, and the stop-loss is calculated around $139.81.
Fundamental Analysis
From a fundamental standpoint, Amazon’s market capitalization is an impressive $1.52 trillion, reflecting the company's magnitude and investors' confidence. The trading volume of 44.10 million is below the average volume, which could mean less conviction in the current price movement or simply a cool-off period.
The earings per share (EPS) of $1.91 and a relatively high price to earnings (PE) ratio of 76.81 show that investors are willing to pay a premium for Amazon's future growth prospects, though it also indicates that the stock is not cheap. The company's aggressive expansion in many domains, including e-commerce and cloud computing (AWS), justify optimism in Amazon's ability to generate future profits.
Amazon's upcoming initiatives as detailed in recent news, such as expanding its delivery and transportation infrastructure, may fuel further growth. The anticipation of Black Friday sales and the holiday shopping season could also translate to a short-term increase in revenues. On a cautionary note, the strike by workers in Spain could pose a risk to operations, however, the impact is likely confined to regional levels rather than affecting the global scale of operations.
The European Union's expected approval of Amazon’s acquisition of iRobot Corporation aligns with Amazon's strategy to lead in smart home devices and robotics, opening up yet another avenue for revenue generation.
Stock Performance Predictions
Given the strong technical indicators and positive news flow, one could anticipate AMZN to perform well on the next trading day, November 24, 2023. The upcoming week might see sustained momentum based on the holiday shopping season, barring any unforeseen negative news. However, investors should be cautious of the stock entering overbought territory, which could lead to a temporary correction.
Overall Evaluation
Considering the technical strength, solid fundamentals, and recent developments, the stock of Amazon.com, Inc. can be classified as a 'Buy' for investors with a moderate to high-risk tolerance and a focus on long-term growth. Analyst consensus also reflects a 'Buy,' based on 37 analyst ratings. The target price consensus at $166.19, with a high estimate of $270 and a low estimate of $103, suggests that there is potential upside to the current price.
Investors are encouraged to consider their own risk profiles and investment strategies, as well as to keep abreast of any changes in market conditions, as the situation can change rapidly in the fast-moving tech sector.
