Is Amazon is Setting Up for a Big Move?

Amazon.com (AMZN) has been trading in a sideways range for almost a year. The stock has formed a key resistance level and a level of support. The stoc...
Is Amazon is Setting Up for a Big Move?
Image credit: shutterstock.com via StockNews

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
3 min read
This story originally appeared on StockNews
Amazon.com (AMZN) has been trading in a sideways range for almost a year. The stock has formed a key resistance level and a level of support. The stock is expected to either break through its resistance or fall through its support. Read more to learn how to take advantage of this trade.
 

Amazon.com Inc. (AMZN) is a leading online retailer and one of the highest-grossing e-commerce aggregators. The company’s offerings also include Amazon Web Services' cloud computing, storage, database, advertising services, and co-branded credit cards.

The company has been gaining on more Prime subscriptions, which were driven by the coronavirus-led spike in online orders. In addition, AMZN is seeing strong adoption of AWS through expanding its AWS services portfolio. The company is also benefiting from its devices strategy as Alexa powered Echo devices are selling well.

AMZN has a solid balance sheet with a current ratio of 1.1 and a debt-to-equity ratio of 0.8. Management is also highly efficient with a return on equity of 26%. In the most recent quarter, earnings soared 215% year over year and sales jumped 43.8%. Analysts forecast a 29.5% year over year rise in sales and 19.10% rise in earnings for the current quarter.

AMZN is overvalued with a trailing P/E of 66.32 and a forward P/E of 58.48. The stock has shown mixed performance since last July as shown in the chart below.

Click Here to Read the Greatest Trading Book Ever Written

Take a look at the 1-year chart of AMZN below with added notations:

  Chart of AMZN provided by TradingView

AMZN has been trading in a large, sideways range for almost a year now. While in the range, the stock has formed a key resistance at $3350 (blue), and an area of support at around $2900 (red).  AMZN looks like it's headed back to $3350, and a break through it most likely means another big leg higher is underway.

AMZN is trading within a range. The possible long positions on the stock would be either on a pullback to $2900 or on a breakout above $3350. The ideal short opportunity would be on a break below $2900.

Want to Discover More Great Trades?

I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don’t work at all.

That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!

5 WINNING Stock Chart Patterns

Have a good trading day!

Good luck!

Christian Tharp, CMT

@cmtstockcoach


AMZN shares fell $21.24 (-0.61%) in premarket trading Friday. Year-to-date, AMZN has gained 6.49%, versus a 12.17% rise in the benchmark S&P 500 index during the same period.

Amazon (AMZN) is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.


 
 

About the Author: Christian Tharp


I am an expert coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.

More...

The post Is Amazon is Setting Up for a Big Move? appeared first on StockNews.com
More from Entrepreneur
Our Franchise Advisors are here to help you throughout the entire process of building your franchise organization!
  1. Schedule a FREE one-on-one session with a Franchise Advisor
  2. Choose one of our programs that matches your needs, budget, and timeline
  3. Launch your new franchise organization
Make sure you’re covered if an employee gets injured at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business
Make sure you’re covered for physical injuries or property damage at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business

Latest on Entrepreneur