is in trouble. We've covered the stock many times in the past,
offering both bullish and bearish recommendations. And ChartWatch
has provided very accurate analysis, too.
In one of our more recent reports, we highlighted the numerous
times AMZN's trend found support at the 200-day moving average
(blue arrows below).
This report recommended
buying the shares as they retraced back down to the 200-day
moving average (black line) in November. That recommendation was
good for a 29% gain as AMZN rose to $285 after bouncing off the
Though AMZN hasn't yet broken its 200-day, I don't expect the
trend line to prevent the shares from falling this time for
First, the 50-day moving average (orange line) is flat and
starting to curl over, suggesting that the near-term trend is
bearish. This trend line is at $263.63 right now, and should
provide resistance to the stock. There is also strong resistance
near $260 (blue line), which should also prevent the shares from
rising in the upcoming sessions.
This chart shows the price of
shares along with an important trend line to monitor.
In addition to those areas of selling pressure, AMZN must win
investors over again. The stock has been a darling of Wall Street
for many years. However, CEO Jeff Bezos and the rest of
management failed to impress shareholders in the most recent
quarter. AMZN beat analysts' EPS estimates by a wide margin, but
failed to exceed sales expectations. There's also commotion about
the online sales tax, which could wipe away Amazon.com's big
Since Amazon.com is not yet posting major earnings, analysts have
focused mostly on revenue growth in previous earnings reports.
The miss last week caused the shares to plummet 8%, making a
near-term recovery unlikely for the stock. While AMZN remains
above the 200-day moving average, I expect that sellers will
break this trend line soon, taking the shares down to around
Equities mentioned in this article: AMZN
Positions held in companies mentioned above: