Amazon.com (AMZN) Pullback Offers Incredible Opportunity


 
 
08:49 10/13/2018

Amazon.com AMZN  is excessively oversold.

In fact, the last two times the stock was this oversold it bounced back more than $500. And if we’re right, it could happen again, especially as we near the holiday season.

Notice what happens each time AMZN tests its lower Bollinger Band (2,20). Not long after it begins to pivot higher. Now look at what happens when Relative Strength (RSI) falls to or below its 30-line with an extreme drop on MACD, and a pullback to less than 80 on Williams.

About 80% of the time, the stock bounces back in a big way.

In late March 2018, it bounced from about $1,350 to $1,788. In August 2017, it bounced from $1,000 to $1,500. Now with Bollinger Bands, RSI, MACD and W%R in alignment again, we believe the stock could refill its bearish gap around $2,000.

From there, we believe AMZN could move to $2,500.



From there, analysts at Jefferies believe the stock could rally to at least $3,000 a share by 2020.

According to Jefferies, as noted by US News, “Amazon’s key business segments, including core e-commerce, Amazon Web Services public cloud and Amazon Prime subscription services, are showing no signs of slowing down. At the same time, emerging high-growth businesses such as advertising could potentially be big for Amazon in the longer term.”

Even Tigress Financial just reiterated its buy rating on the stock, believing the recent pullback is a buying opportunity. Plus, we have to remember that AMZN is one of the most powerful companies on the planet. It’s growing quickly with no real signs of slowing growth.

To us, the recent pullback is a gift to smart investors, especially with the holidays quickly nearing. In fact, consider this, the National Retail Federation (NRF) says Americans will increase holiday spending by 4% this year to $721 billion.

In addition, research firms Forrester and eMarketer believe online sales could grow between 13.5% and 16.2% this holiday season.

That could be a sizable boon for Amazon.com

“Shoppers are using more online sources than ever: apps, wish lists, online gift registries, social media and blogs have all gradually grown over the past three years,” says Forrester, as quoted by Digital Commerce 360. “By contrast, traditional sources such as circulars, catalogs, direct mail, magazines, television, radio and inspiration within a retail store have all declined over the same period.”

It’s just another reason to get bullish on Amazon’s latest pullback.


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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