Amazon.com: Mind the Gap!

2021년 8월 11일

Amazon.com rallied into its last earnings report, and crashed on a very weak outlook. Now traders may need to mind the price gap that resulted.

So far, AMZN hasn’t even tried to fill that chasm, which creates the risk that it will become a longer-lasting scar on the price chart.

Second, relative strength versus Consumer Discretionaries was slowing before the poor results and has only worsened since.

The selloff also represents a false breakout. The bulls tried to drive prices into new territory and were punished. This can be very negative for sentiment, and provide plenty of ready sellers if the stock tries to reclaim the highs.

The post-gap highs could also be problematic because AMZN has remained below the $3,400 level where it bounced immediately before July’s breakout. Is old support new resistance?

Next, on the weekly chart, the selloff produced a bearish engulfing candle with high volume:


Finally, the macro environment is more challenging as e-commerce moves past last year’s covid bump. The big question in coming quarters could be whether companies like AMZN simply cannibalized future growth in 2020.

Let’s see what happens in the next few weeks as brick and mortar names like Target report. Will investors unload AMZN to add traditional merchants into the holidays?

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