- Overall AMZN has been a great stock and has outperformed during this Covid 19 environment. Last Week we saw Amazon beat revenue expectations but fell short on profit expectations and the stock fell 8%.
Technically the stock has remained in a strong uptrend but has been overbought for sometime - which is earmarked by the Demark 9 count.
We are seeing price bounce in a Megaphone consolidation pattern. This can mark a Toppy sort of pattern especially if we take out the lower leaning line. A good entry point would be at the below demand zone - if price fill the gap then there's a possibility we are going to see this zone tested. However we may see more consolidation & sideways action and don't expect prices to reach here quickly.
Current prices are baking in around a 50% YoY increase in Earnings - which is pretty high. However Amazon has been one of the greatest growth stories off all time. Bezos is still the richest man in the world even after his divorce! Showcasing Amazon's relentless MarketCap Growth and its New Trillion Dollar price tag.
Bezos told investors to take a seat as it would invest its $4 billion second-quarter profit in Covid efforts, by buying protective equipment, cleaning in its facilities and building its own testing capability. He is taking a long term view which will benefit the company but probably hurt financials/operating costs in the short term.