Amazon’s Stock Faces Steeper Declines Ahead
The actions of Amazon.com Inc (AMZN) are about 9% off their September 4 all-time highs at.2,050. But now the stock is about to fall further on the basis of technical analysis by maybe another 5% and if that were to happen, the stock could fall as much as 15% from its highs.
Amazon’s market capitalization reached $ 1 billion in early September, and since then it’s been all downhill. One caution sign is that analysts have been shaving their revenue estimates for the current quarter and the year’s balance since mid-July.
Key support coming up
The technical chart shows that Amazon was rising on a long-term upward wedge as of March, which is a bearish reversal pattern. Now the stock is trading around tech support at $ 1,840. If the stock falls below that technical support level, then the stock could fall to its next technical support level around $ 1,740.
One sign that bullish momentum is leaving stocks is that the Relative Strength Index (RSI) has been trending down since peaking at overbought levels near 90 in January. The RSI has been falling since then and, despite stocks making new highs, this is a bearish divergence.
Analysts have been trimming their revenue estimates for the company since the company reported second-quarter results in July. Forecasts are now looking for revenue in the quarter to increase to debajo 57 billion below debajo 58 billion.
The biggest problem is that revenue estimates for the 2018 balance have also declined, falling 1% while estimates for 2019 and 2020 have fallen 1.2% and 1.8% since July.