Amazon Has Long Trailed the S&P 500. What Its Chart Says Now.Longtime tech darling Amazon NASDAQ:AMZN has trailed the S&P 500 SP:SPX during 2025, as well as over several other time periods ranging from six months to five years. Let's see what its chart and fundamental analysis say might happen next.
Amazon's Fundamental Analysis
Amazon's massive online-retailing, cloud-computing and other businesses could mean the company has more of an opportunity than many other Big Techs to benefit from integrating generative and agentic artificial intelligence into its operations.
Today's Amazon is a labor-intensive company, what with all of its warehouses, trucks and other human-run operations.
AI could bring increased efficiencies and productivity that could, for better or worse, lead to decreased human labor at the firm. That, in turn, might boost margin performance as Amazon's operations evolve into something smarter, more capable and inevitably less human-driven.
And unlike other Big Techs or hyper-scalers, Amazon's underperformance in recent years might leave it better positioned to benefit from such a transition.
Wall Street expects the tech giant to report Q4 results in early February, with the Street currently looking for $1.94 in earnings per share on roughly $211.1 billion revenue.
That would represent a 4.3% year-on-year gain from the $1.86 in EPS that Amazon saw in Q4 2024, as well as about 12.4% sales growth from the $187.8 billion reported a year earlier.
If that holds true, it'd be the second straight quarter of better-than-12% y/y sales growth for AMZN following four consecutive quarters of sub 12% revenue gains.
Meanwhile, 32 of the 43 sell-side analysts that I can find that cover Amazon revised their earnings estimates higher since the latest quarter began vs. just three who've lowered their numbers. (Eight have left their estimates unrevised.)
Amazon's Technical Analysis
Next, let's look at AMZN's chart going back some seven months and running through Wednesday afternoon:
Readers will first notice a flat base and a failed breakout in late October and early November around Amazon's Oct. 30 Q3 earnings report.
As that breakout failed to hold, a post-earnings gap that the stock left behind ultimately filled in.
Amazon then lost both its 21-day Exponential Moving Average (or "EMA," marked with green line) and its 50-day Simple Moving Average (or "SMA," denoted by a blue line) without showing much support. It looks like neither the swing crowd nor professional money managers seemed very interested in defending the stock at those levels.
AMZN next developed a closing-pennant, marked with black diagonal lines at the chart's right. However, shares repeatedly found support and resistance at either the top or bottom of those two narrowing trendlines.
In doing so, Amazon waffled around its 50-day SMA and 21-day EMA. Professional money managers probably didn't enjoy this, but the swing crowd almost definitely did.
It's also worth noting that one thing to know about closing pennants is that they often foretell a coming period of explosive volatility, although they don't tell you whether that will be up or down.
But as Amazon has recently retaken its key 50-day line, perhaps the market has chosen an upward direction.
Meanwhile, Amazon's Relative Strength Index (the gray line at the chart's top) has moved above neutral and into its strongest position since early November.
The stock's daily Moving Average Convergence Divergence indicator -- or "MACD," marked with black and gold lines and blue bars at the chart's bottom -- is improving as well.
For instance, the histogram of the 9-day EMA (marked with blue bars) has crossed above the zero bound, which is a short-term bullish signal.
The 12-day EMA (the black line) has also moved above the 26-day EMA (the gold line), which is another positive. Now if those two lines can both move above the zero-bound while the 12-day line continues to run above the 26-day line, that would amplify the bullish signal.
An Options Option
Options traders who are relatively optimistic and want to take a bullish stance on AMZN going into February's earnings without actually buying the stock might be considering a simple bull-call spread based on the above technical indicators.
That's where you buy one call and sell another with a higher strike price, but with both having the same expiration date. Here's an example:
-- Long one AMZN call with a Feb. 6 expiration (i.e., likely after the next earnings report) and a $230 strike (the stock's 50-day SMA in the chart above). This cost $13.15 at recent prices.
-- Short one AMZN $255 Feb. 6 call for roughly $4 at recent trading levels.
Net Debit: $9.15.
This trader would be laying out a net $9.15 in an attempt to take in $25 at expiration, for a $15.85 maximum potential profit. The trade would max out if AMZN closes above $255 at expiration.
Conversely, the above trade's maximum theoretical loss would be the $9.15 net debit. An options trader would face that if the stock closed below $230 at expiration.
(Moomoo Technologies Inc. Markets Commentator Stephen "Sarge" Guilfoyle was long AMZN at the time of writing this column.)
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