Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. Price action is bullish as it is avatrade broker above an upward-sloping 30-week EMA. The bullish head and shoulders chart pattern indicates a potential price target that is 20% higher than current prices.
The bottom pane of Chart 1 shows the ratio of AMZN to the S&P 500 index. When the black is rising that means AMZN is outperforming the S&P 500 index. When the black line is falling, that means AMZN is underperforming the S&P 500 index.
© 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer. The company is scheduled to release its next quarterly earnings announcement on Thursday, April 25th 2024.
The company also provided an operating income guidance of $5.5 billion to $8.5 billion, which potentially triples the $2.5 billion earned in last year’s third quarter. Get stock recommendations, https://forexhero.info/ portfolio guidance, and more from The Motley Fool’s premium services. In December 2021 AMZN closed below the 30-week EMA and essentially stayed below that EMA for the next 16 months or so.
- Since May 2023 AMZN has stayed above its 30-week EMA and has made a series of higher highs and higher lows.
- AI is the catalyst for innovation across major industries.
- I prefer to own stocks that are outperforming the major index.
- Walmart’s total footprint in the U.S. devoted specifically to e-commerce fulfillment is estimated to be just 21 million square feet, with 7 million planned for future use.
- Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed.
That higher low also allows the 30-week EMA to flatten out which it must do before it can start an upward sloping trajectory. Then AMZN continued to rally and closed above its 30-week EMA in April 2023 and stayed above that EMA. This was different behavior from previous closes above the 30-week EMA back in March 2022 and July and August of 2022. In those instances, AMZN couldn’t stay above the 30-week EMA indicating that the bearish trend was still in place. In May 2023, AMZN closed above the high it made in January 2023 at $114.00 officially making a higher high after a previous higher low.
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AMZN Overview
The first way is when the black PPO line crosses above the red signal line. This simple crossover technique shows that momentum is bullish in the short term. I say short term because you can see that this crossover happens often.
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Notice the difference in relative strength between the bearish period outlined above and the bullish period we are in now. During the bearish period, AMZN underperformed the major index. I prefer to own stocks that are outperforming the major index. I think that relative strength is bullish for AMZN. In May 2023 you can also see that the 30-week EMA is starting to trend upwards as well.
When the black PPO line crosses below the red signal line that shows short-term bearish momentum. The second way PPO shows momentum is when the black PPO line is above the zero or centerline of the PPO chart which I consider to be a long-term momentum indication. Currently, the black PPO line is at 6.243, well above the zero or centerline. You can see why this is considered a long-term momentum indication. PPO does not cross above or below the zero or centerline that often.
However, price action started to change in January 2023 to the bullish side. AMZN rallied from $81.43 up to $114.00 over the next five weeks. Then it declined back to a low of $88.20 in March 2023. That was significant because AMZN put in a higher low versus a lower low which it had been doing after the preceding rallies. The big bullish candle in March 2023 was the first sign of this lower low being in place.
To get a handle on that, you have to take a step back and figure out what’s working for and against the company, and how those things might change between now and then. Access our top stock picks, proprietary research reports, stock screeners and more. There are three megatrends, however, that matter more than anything else at this time. From healthcare to retail, finance to education…
Financial Forecast
The trend changed from bearish to bullish in May 2023. Looking at the price action in Chart 1 you can see that AMZN was at $187.67 in November of 2021. From there it headed south for the next 13 months. The blue line on Chart 1 shows the 30-week exponential moving average. This to me is an intermediate to long-term moving average that was popularized by Stan Weinstein in his 1988 book Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets. I like to use this moving average the most when I analyze stocks.
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Both short and long-term price momentum is bullish. AMZN shares have been under institutional investor accumulation which I view as bullish. Finally, AMZN is outperforming the S&P 500 index which is bullish. When I buy a stock, I want to see bullish momentum and the Percentage Price Oscillator (PPO) shown in the top pane of Chart 1 assists me in that effort.
Nevertheless, it is possible to use historical data and current information to figure out where a company is likely to be at some point in the future. That type of volatility is typical of tech stocks. If you prefer assets with more stability, top consumer staple stocks may be a better fit. Here’s a look at each company’s cash position through the end of the most recent quarter. Of course (and as always), bear in mind that something dramatic could change in the meantime, and no stock moves from one price to another in a straight line. But what will the stock arguably be worth five years from now?
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Notice in January 2022, the black PPO line crossed below the zero or centerline and stayed that way during the entire bearish period. Price action, the 30-week EMA, and PPO were all telling the investor to not be long AMZN during that period. PPO is confirming the bullish price action and the bullish 30-week EMA trend. The volume also confirms the bullish trend in AMZN. During the bearish trend, all the high-volume bars were in red showing selling activity by institutional investors. Since the low in January 2023, with one exception, the biggest bars are black bars showing institutional investors are accumulating shares of AMZN.