Market Jitters Ease as Amazon Stock Rebounds
After a tumultuous early August, when Amazon’s stock price plummeted below its 200-day moving average, the e-commerce giant has staged a remarkable comeback. The company’s shares have been on an upward trajectory over the past month, poised to reach a new buying point.
On August 2, Amazon’s stock breached its 50- and 200-day lines in heavy trading volume, triggering sell signals. This came on the heels of the company’s mixed second-quarter results, which saw earnings beat expectations but revenue fall short of projections. Despite a strong showing from Amazon’s cloud computing division, the company’s sales forecast was lower than expected.
However, in early September, Amazon’s stock began trading above its 200-day moving average once again. JMP Securities analysts took note, raising their price target and reiterating a market outperform rating. The analysts cited Amazon’s robust advertising technology stack and expected growth in ad sales.
Fast-forward to September 11, when Amazon’s stock regained its key 50-day moving average, further improving its chart. As the stock continues to gain momentum, it is now forming a cup base with a 201.20 buying point. The Relative Strength Rating has improved to a solid 81, up from 70 a week ago and 61 two weeks prior.
The up/down volume ratio has also improved to a neutral 1.0, with an Accumulation/Distribution Rating of B. Moreover, the relative strength line has shown improvement from its recent lows, although it still lags behind its 52-week high set in April.
Investors will be watching to see if the stock breaks out to new highs, which could signal a return to its former glory. In the meantime, Amazon’s rebound has been a welcome respite from the market volatility of late.
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