The Best Amazon Stock Breaks Down From Key Support Levels
Data encoding method: (AMZN) broke with key levels of technical support on Monday after the company warned some of its customers that their email addresses were shared by an employee with a third-party seller. The data leak comes just weeks after The Wall Street Journal reported that the company was investigating its employees for leaking customer data in exchange for bribes. In a separate article, The Wall Street Journal noted that Amazon relies on these third-party sellers to bolster its top and bottom line, which could make these developments a concern for investors.
The tech sector also remained under pressure during Monday’s session, contributing to the bearish sentiment surrounding Amazon. Open system. (CRM) shares were down more than 4% at the start of the session, while software and service companies were down 2.2%. Investors may be giving more weight to value stocks over growth stocks after last week’s strong jobs report. (SEE ALSO: Amazon Bulls Double Down despite shaved forecasts.)
Technical graph showing the performance of Amazon.com, Inc. (AMZN) stock
From a technical point of view, Amazon shares broke from the key trend line and S1 support levels at $ 1,895.17 to lows not seen since late August. The Relative Strength Index (RSI) is approaching oversold levels with a reading of 36.92, but the Moving Average Convergence Divergence (MACD) experienced a bearish crossover and remains in a downtrend dating back to early September. These indicators suggest that the stock could continue to fall in the coming sessions.
Traders should be on the lookout for a lower move to S2 support at $ 1,787.33, where the stock could consolidate. A breakdown of these levels could lead to a move down to the 200-day moving average at $ 1,629.84. If the stock bounces above the trend line and S1 resistance, it could re-test the trend line and pivot point resistance at $ 1,972.83, though that scenario seems less likely given the bearish sentiment surrounding Amazon and the tech sector.