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Amazon.com, Inc. (AMZN)

Amazon stock forecast: buy or sell

Close on Oct 23rd, 2020
$3204.4 +0.88%
3 months performance
4.90%
Published: October 23rd, 2020 - 4.17pm EDT

Amazon stock outlook

  • Amazon closed today at $3,204.40 after just moving a 0.88%.
  • Goldman Sachs Group published a strong bullish rating for Amazon today
  • From the chart point view, price is drawing an scaled downtrend since early September with lower tops and lower bottoms. shares price lost a -9.79% since the downtrend started.
  • Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally.

Disclaimer:
The viewpoints expressed in this post are personal and should not be followed as recommendations for you to buy or sell stocks. The author of this text does not know the particular positions of the reader, his or her own finances or his or her own best interests at any given time. All users should speak with their financial advisor before buying or selling any securities Viewpoints are published for education reasons only

Amazon stock charts

Should I buy Amazon stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is $AMZN stock a buy?

Currently, Amazon stock doesn't match any of these trading strategies, so our recommendation is not to buy now. This doesn't mean we expect a selloff for $AMZN in the next few days, or that it may not rise higher. Simply, it doesn't match our recommended trading systems

Should I sell Amazon stock?

When you are a novel trader and you own stock shares with some profit, it's really hard to decide the best moment to sell and get your benefits. Trading strategies help us to avoid rash decisions based on our feelings or the buzz that surrounds the market. When selling, as well as buying, detailed setups are very easy to follow but are only valid for selling stocks you already own, not for shorting Amazon stock

As a rule of thumb, you must never mantain an open trade that results in greater losses than those expected upon purchase. The moment to sell shares always has to be determined by the stop-loss (automatic or manual)

Is it time to sell Amazon stock?

Currently, Amazon stock doesn't match any of our preferred sell setups, so if you hold Amazon shares and your operation is in profit probably is not time to sell now

Analysts' recommendations to buy or sell Amazon stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last month, 10 brokerage ratings were published for Amazon. General sentiment is bullish, with 10 out of 10 posting optimistic outlooks

Amazon ratings

Brokerage firmRating
Sep 25th, 2020
Piper Sandler Buy
Oct 1st, 2020
Jefferies Financial Group Strong buy
Oct 1st, 2020
Pivotal Research Strong buy
Oct 2nd, 2020
Societe Generale BuyStrong buy
Oct 7th, 2020
Benchmark Strong buy
Oct 7th, 2020
JPMorgan Chase & Co. Strong buy
Oct 9th, 2020
Mizuho BuyStrong buy
Oct 12th, 2020
Jefferies Financial Group Strong buy
Oct 15th, 2020
Morgan Stanley Buy
Oct 23rd, 2020
Goldman Sachs Group Strong buy

Technical analysis

Amazon continues in downtrend since early September, and has accumulated a selloff of -9.79%. The stock drew 2 consecutive lower tops

SMAs overview

A favorite tool of many traders are the moving averages, that easily show trend momentum. A moving average is calculated as the simple mean of the previous N periods (usually sessions). Usual time periods used for moving averages are 21 days, 50 days, 100 days and 200 days. Further about Moving Averages from sources like Wikipedia and Investopedia

AMZN SMAs chart

Supports and resistances

Investors use support and resistance levels to find price points on a chart that may work as obstacles, containing the price of a stock to move up or down. A support level is a level where the price tends to stop as it falls. Price is more likely to "rebound" this level rather than break through it. Nevertheless, if the price breaks down this level, it is likely to continue falling until approaching another support level. On the other hand, resistance levels are where the price tends to find a curb as it rises. In the same manner, this means that the price is more likely to "rebound" at this level, and if it finally breaks this level, the price will rally more easily until it hits the next resistance

The current resistances are:

  • R1: $3,344.29 (4.37% above)
  • R2: $3,496.24 (9.11% above)
  • R3: $3,552.25 (10.86% above)
  • The current supports are:

  • S1: $2,888.00 (-9.87% below)
  • S2: $2,871.00 (-10.4% below)
  • S3: $2,525.45 (-21.19% below)
  • Bollinger bands

    The so-called Bollinger bands are a well-established technical strategy developed by John Bollinger. In essence, the Bollinger Bands are bands that fluctuate around a moving average, ranging the distance from the bottom to the top depending on market volatility. They are usually drawn by an offset of two standard deviations, above and below, from a moving average line. Bollinger himself recommends the moving average period to be 20

    Since the price surpassed the upper band on October 13, the price dropped by 8.25%

    AMZN RSI chart

    Relative strength index

    The Relative Strength Index is an oscillator-type indicator that measures price action to detect when the share or financial asset is oversold or overbought. Like other oscillation indicators, the RSI ranges between 0% and 100%. The relative strength indicator is one of the best known and most widely used indicators, invented by J. Welles Wilder in 1978

    The RSI dropped below the overbought level of 70 in early September after just crossing to the overbough zone for 1 day (weak signal). The RSI value today was 49.06. Amazon stock sank a 9.26% since RSI lost the overbought zone

    AMZN RSI chart

    Earnings and financials

    In late July, Amazon ($AMZN) hosted the financial event and presented the fiscal second-quarter report. Amazon reported FQ2 earnings of $10.30 per share versus Wall St estimate that was $1.46.

    Same quarter last year, reported EPS was $5.22, so recently reported EPS means an increase of 97.32%.

    Amazon ($AMZN) is hosting the quarterly earnings call on Thursday next week. Expected EPS for this quarter is $7.25, compared to $10.30 that was reported for Q2.

    AMZN revenues and profits chart