The decline in the share of the online retailing giant during the last four weeks has worried some investors that more downside is ahead. The shares of the online retailing giant have declined 11.5% through Wednesday’s close of $958 since peaking at $1,083.31 on the morning ahead of an earnings report which looked very disappointing.
Amazon’s stock is at a vulnerable technical position: Analyst
This stock is in a vulnerable technical position, says Rich Ross, who is technical analyst at Evercore ISI. On Wednesday, in an interview during CNBC’s “Power Lunch,” Ross said that the “stock has shown classic signs of exhaustion and is sitting on key support at $950 in the short term now — below which could test that 200-day [moving average] down around the big round number at $900.”
Further, the analyst said that the action of the stock is very “un-FANG like.” Ross was referring to the much-discussed group of four top surging tech stocks including Google Parent Alphabet, Facebook, Netflix and Amazon.
Ross said, “In three of the last five years, the stock has had 30 percent pullbacks. That’s not the base case here, but with the stock just 10 percent off an all-time high going into the worst month for stocks historically, I would not be a buyer.” He added, “I would be a buyer lower — down around $900, $870.”
Erin Gibbs, S&P Global portfolio manager, also spoke on the stock saying that the July earnings report of the e-commerce giant was a huge blow to the bulls.
Amazon share’s condition is not that bad yet
He said on the “Power Lunch” on Wednesday, “Not only did they massively miss expectations for their profit on second quarter, but the expectations of what they’re going to make over the next 12 months has been almost cut in half.”
He added, “It’s not that they’re not making revenues — they’re still taking over the world — it’s just way more expensive than they originally thought. And so technology costs and marketing costs are both significantly higher.” The global portfolio manager added, “I’d say we could see more of a decline until we see some stabilization of those costs.”
Well, you should not feel very bad or “concerned” for the Amazon stock and its shareholders just yet. The stock is still 28% higher this year.