There is no doubt that Amazon (AMZN) has been a darling with both Wall Street and the individual investor for some time. The company was thought by some to have almost unlimited growth possibilities and has definitely been the leader in on-line retailing. Has the stock hit its peak or is there room to grow? This graph provided by Barchart shows a 20, 50 and 100 week moving average and a 14 week turtle chart which seem to imply the stock price has hit a resistance level:
When I compare the stock price over the last 50 trading sessions to the Value Line Index of 1700 stocks it shows that the price weakness has nothing to do with the recession or the market:
Barchart technical indicators:
- Barchart uses technical indicators from 7 days to 6 months duration to analyze the direction and strength of a stock's current price - lately the sell signals have been increasing and getting stronger
- 80% Barchart technical sell signal
- Trend Spotter sell signal
- Below its 20, 50 and 100 day moving averages
- Barchart computes a technical support level at 175.74
- The stock is 26.05% off its 1 year high and 17.95% off its 1 month high
- Relative Strength Index 36.11% and falling
- The stock is recently trading at 182.61 and below its 50 day moving average of 211.98
- The Barchart hourly trading graph of the last month show a current decline in price:
Summary: Although I think Amazon (AMZN) will increase sales and earnings in the long run I think the price is too high to enter at this point. If I owned the stock I'd make sure I had stop losses in place or at least buy some protective puts. If I did not own this stock or wanted to add to an existing position I'd monitor the stock's price using the 20, 50 and 100 day moving averages and a 14 day turtle chart like to one attached below to decide when the stock price bottoms out.
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