Amazon.com, Inc. (AMZN)

Amazon stock forecast: buy or sell

Amazon stock outlook

  • Amazon closed on Friday at $3,167.46 after substracting a -1.78% breaking a streak of 3 sessions in green.
  • From the chart point view, price is drawing a scaled uptrend since mid-March with higher tops and higher bottoms. Up to date, shares marked a 94.8% gain since the beginning of this rally
  • On July 30, Amazon released its Q2 earnings report
  • Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally.
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Important note:
The viewpoints expressed in this article are personal and should not be followed as recommendations for you to buy or sell stocks. The author of this document does not have any knowledge of the individual scenarios of the reader, his or her finances or what is in his or her best interest at any given time. All users should speak with their financial advisor before buying or selling any securities Viewpoints are posted for informational reasons only

Amazon stock chart overview

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 matches one trading strategy:

Uptrend buy setup

Amazon stock continues to trend higher since in mid-March and has marked a gorgeous 94.8% gain. Price marked a local bottom in this uptrend at $2,888.00 on July 24, and since then it bounced up a 9.68%. Now, it's just 5.58% away from breaking out above its last top and resume the uptrend. The new buy point is therefore at $3,344.29. If you decide to enter this trade, the suggested stop loss is at $3,009.86

Buy setupBuy pointStop lossRisk
Uptrend buy setup$3,344.29$3,009.8610%
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Should I sell Amazon stock?

Do you know when is it time to sell Amazon stock?. Much like when we have to buy shares, determining when is appropiate to sell is not a whimsical decision, and we must adhere our own trading strategy. When selling, as well as buying, detailed strategies are very simple to use and are only valid for selling shares in your porfolio, not for shorting Amazon stock

As a golden rule, you should not mantain an investment that generates higher than expected losses at the time of the buy. When to sell shares always has to be ruled by the stop-loss (automatic or manual)

Is it time to sell Amazon stock?

In the current situation of Amazon there is not any eligible sell setup, so Amazon stock holders with operations in profit can keep their positions

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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, 40 brokerage ratings were published for Amazon. General sentiment is bullish, with 34 out of 40 posting optimistic forecasts

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Amazon ratings

Brokerage firmRating
Jul 24th, 2020
Credit Suisse Group Buy
Jul 24th, 2020
KeyCorp Buy
Jul 24th, 2020
SVB Leerink Neutral
Jul 27th, 2020
Bank of America Strong buy
Jul 27th, 2020
Credit Suisse Group Strong buy
Jul 27th, 2020
Goldman Sachs Group Strong buy
Jul 27th, 2020
Telsey Advisory Group Buy
Jul 27th, 2020
Wedbush Strong buy
Jul 27th, 2020
Wells Fargo & Co Neutral
Jul 30th, 2020
BMO Capital Markets Buy
Jul 30th, 2020
MKM Partners Strong buy
Jul 31st, 2020
Barclays Buy
Jul 31st, 2020
Benchmark Strong buy
Jul 31st, 2020
BofA Securities Strong buy
Jul 31st, 2020
Canaccord Genuity Strong buy
Jul 31st, 2020
Credit Suisse Group Buy
Jul 31st, 2020
DA Davidson Strong buy
Jul 31st, 2020
Deutsche Bank Strong buy
Jul 31st, 2020
Edward Jones Strong buy
Jul 31st, 2020
Goldman Sachs Group Neutral
Jul 31st, 2020
Guggenheim Neutral
Jul 31st, 2020
JMP Securities Buy
Jul 31st, 2020
JPMorgan Chase & Co. Buy
Jul 31st, 2020
KeyCorp Buy
Jul 31st, 2020
Mizuho Strong buy
Jul 31st, 2020
MKM Partners Neutral
Jul 31st, 2020
Monness Crespi & Hardt Strong buy
Jul 31st, 2020
Morgan Stanley Buy
Jul 31st, 2020
Needham & Company LLC Strong buy
Jul 31st, 2020
Oppenheimer Buy
Jul 31st, 2020
Pivotal Research Strong buy
Jul 31st, 2020
Raymond James Buy
Jul 31st, 2020
Robert W. Baird Neutral
Jul 31st, 2020
Royal Bank of Canada Buy
Jul 31st, 2020
Stifel Nicolaus Strong buy
Jul 31st, 2020
UBS Group Strong buy
Jul 31st, 2020
Wedbush Buy
Aug 3rd, 2020
Barclays Strong buy
Aug 3rd, 2020
Goldman Sachs Group Strong buy
Aug 3rd, 2020
Royal Bank of Canada Strong buy

Technical analysis

Since in mid-March, Amazon has been printing an uptrend that so far marked a gorgeous 94.8%. During this uptrend, the price provided some entry points on the breakouts. Latest pullback was on July 24, when price bounced at $2,888.00. Currently, it swings in a consolidation between its last top ($3,344.29) and its last bottom ($2,888.00)

SMAs overview

A favorite tool of many trading systems are the moving averages, that easily show market direction. A moving average is the average price of a stock over a set period of time. 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

Supports and resistances

Market investors use support and resistance levels to spot price points in the stock price action that tend to behave as glass ceiling, containing the price of shares to move up or down. A support level is a level where the price tends to find support as it falls. Price is more likely to "bounce off" this level rather than break through it. However, if the price breaks down the support, it will probably continue descending until meeting another support level. On the other hand, a resistance level is where the price tends to find resistance as it moves up. Likewise, the price is more liable to "rebound" at this level, and if it finally breaches this level, it will climb more easily until it meets the next resistance

The current resistance levels are:

  • R1: $3,344.29 (5.58% above)
  • The current supports are:

  • S1: $2,888.00 (-8.82% below)
  • S2: $2,525.45 (-20.27% below)
  • S3: $2,475.00 (-21.86% below)
  • Bollinger bands

    This is an indicator that was designed in the 1980s by John Bollinger. It comprises 3 lines that are drawn superimposed on the price evolution chart:

    • The central band is a moving average, usually a simple moving average calculated with 20 periods
    • The upper band is calculated by adding to the value of the simple moving average 2 times the standard deviation of the moving average
    • The lower band is calculated by subtracting from the simple moving average 2 times the standard deviation of the moving average

    The price is trading very close to the upper Bollinger band, indicating some level of overbought in recent sessions. This is not a sell point, as price can move in these levels for many days and weeks

    Relative strength index

    The relative strength index (RSI) is a technical indicator used in the analysis of financial markets. It is intended to chart the current and past strength or weakness of a stock or market based on the closing prices of a recent trading period. Like other oscillation indicators, the RSI fluctuates in a range between 0% and 100%. J. Welles Wilder introduced the relative strength indicator in the late 1970s and since then it has been widely used by stock traders

    The RSI dropped below the overbought level of 70 on July 14 after just crossing to the overbough zone for a single day (weak signal). The RSI value on Friday was 59.4. Since then, Amazon price climbed a 2.04%

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    Earnings and financials

    On July 30, Amazon had the quarterly investors call and posted the Q2 report. Amazon posted Q2 earnings of $10.30 per share on sales of $88.9 billion. The analysts estimate was $1.46 per share on revenue of $80.9 billion.

    In comparison, the EPS for the same quarter last year was $5.22, so reported EPS means a gain of 97.32%. Looking at revenues, figures skyrocketed a 40.23% compared to $63.4B same quarter 12 months ago. Amazon made three year over year quarterly positive results, rising turnover by 103.27% from $43.7B on 2017-Q3.

    Amazon is hosting the earnings call next October. Wall Street expects an EPS of $6.59, compared to previous quarter that was $10.30. If you own or you are looking to buy Amazon shares, be on your toes as the financial reporting day usually has a very high volatility, and price can gap up or down with exceptionally low liquidity and not honouring your buy/stop-loss orders. Check company's website to confirm time and details on the earnings call and the earnings report.

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