Amazon's Technical and Fundamental Analysis: Bullish Outlook with Stable Price Movements

StockInvest.us, 3 weeks ago

Amazon Technical Analysis

As of the June 20, 2024, trading session, Amazon.com, Inc. (AMZN) closed at $186.10, reflecting a gain of $3.29 (1.80%). The intraday low and high were $182.72 and $186.50, respectively. The stock has recently experienced increased trading activity, with a volume of 43.94 million shares compared to an average volume of 38.44 million, potentially indicating heightened interest or news affecting the stock.

The Relative Strength Index (RSI14) stands at 64, suggesting that the stock is nearing overbought territory but not yet overextended. The 50-day moving average is $182.94, while the 200-day moving average is significantly lower at $159.82, indicating a strong upward momentum over the medium term.

The Moving Average Convergence Divergence (MACD) over the past three months is -1.08, signaling potential bearish momentum. The Average True Range (ATR), which measures volatility, is relatively low at 1.87, suggesting stable price movements.

Key levels to watch include the support at $185.99 and resistance at $186.21. Given these technical indicators, AMZN likely has a moderately bullish outlook for the next trading day, with potential minor corrections. The tight support and resistance levels suggest limited immediate upside movement but could see testing of the $186.21 resistance.

Fundamental Analysis

Amazon's market capitalization is $1.94 trillion, underscoring its dominant market position. The trailing twelve months (TTM) earnings per share (EPS) is $3.56, resulting in a price-to-earnings (P/E) ratio of 52.28. This relatively high P/E ratio might suggest that investors are expecting robust growth prospects.

Analysts' target predictions indicate a consensus price target of $186.64, which is close to the current trading price, with a high estimate of $270 and a low estimate of $84. The consensus among analysts is predominantly bullish, with 41 strong buy or buy ratings, and only three holds, and no sell recommendations.

Amazon Amazon's next earnings announcement is slated for August 1, 2024. Investors will be closely monitoring this event for any signs of continued growth, especially given the company’s latest strategic initiatives in B2B procurement, aimed at solidifying its business-buyer solutions. This move can drive incremental revenue and strengthen its existing market presence.

The discounted cash flow (DCF) analysis suggests a value of $51.81 per share, which stands in stark contrast to the current trading price. While DCF valuations often hinge on conservative assumptions, the disparity may warrant a reassessment depending on the market's growth expectations and Amazon's revenue trajectory.

Considering the broader market trends highlighted in recent news, Amazon is viewed favorably amongst its 'Magnificent 7' peers, adding a dimension of market sentiment that could bolster its share price.

Stock Performance Prediction

For the next trading day on June 21, 2024, based on technical and market activity, Amazon is likely to trade with a modest positive bias around its current levels, potentially testing the resistance level at $186.21. For the upcoming week, the stock could see some volatility, staying within a range near its 50-day moving average with upward pressure, driven by bullish market sentiment and sector strength.

Intrinsic Value & Long-term Potential

Amazon’s intrinsic value appears undervalued based on DCF metrics but the market price reflects robust growth expectations. The company's continuous innovation and market expansion strategies support its long-term investment potential.

Overall Evaluation

With technical indicators suggesting stability and moderate bullish sentiment and strong fundamental growth prospects underpinned by positive analyst ratings, Amazon is categorized as a 'Hold'. While immediate upside might be constrained due to near overbought RSI and resistance levels, the long-term outlook remains promising, contingent on sustained revenue growth and strategic initiative execution. Investors might re-evaluate post-earnings announcement in August for any significant changes in financial performance or strategic direction.

Check full Amazon forecast and analysis here.