Amazon Stock Price and Forecast: AMZN heads for 200-day moving average

  • Amazon stock falls to key 200-day moving average.
  • AMZN stock has been under pressure since earnings last week.
  • AMZN price sets new lower high as the downtrend persists.

Amazon (AMZN) stock continues its post-earnings retracement with a fall of 1.6% on Monday. Not all too surprising given the earnings disappointment Amazon reported last week. The comparison against a COVID-induced online shopping spree was always going to be hard, and AMZN stock has duly slid lower since. 

Amazon 15-minute chart

As we can see above, Amazon stock has now given back all of its gains for October post-earnings and looks set to trade lower.

Amazon (AMZN) stock news

Just a quick recap on those earnings numbers for those reading for the first time. You can read more here. The online retail giant reported sales and earnings results, which fell short of the Wall Street estimates, with earnings per share (EPS) arriving at $6.12 vs. $8.96 expected and revenue coming in at $110.8 billion vs. $111.81 billion expected.

The company also projected additional costs as a result of supply chain challenges in the fourth quarter. Amazon joins many other tech titans. Notably, Apple is citing supply chain issues. The miss on EPS was significant and led to a host of investment banks cutting their price targets on Amazon. 

In separate news, Rivian (RIVN) is set to IPO shortly, and Amazon has a stake in the electric vehicle maker of nearly 20%. Amazon has ordered 100,000 electric delivery vans from Rivian, and RIVN is set to debut with a market cap of nearly $53 billion, according to the latest estimates. That will put Rivian in the league of mainstream automaker Honda’s valuation, according to Reuters, despite Rivian being a startup and disclosing losses of over $1 billion for the first half of 2021.

Is this more evidence of the increased froth in the stock market pushing valuation to Dot.com era comparisons or a solid growth story in the making? Amazon has not got too much wrong over the years, so it will be interesting to watch Rivian. 

Amazon (AMZN) stock forecast

Regardless of Rivian, Amazon is a tech titan and huge revenue generator. It has now run into tough comparisons versus 2020 when the pandemic led to a surge in online shopping. Ironically, this may have led consumers to appreciate the traditional store and has seen a resurgence in physical consumer retail business. The earnings release confirmed this trend and highlighted growing supply chain issues.

From the chart, Amazon has set a lower high and so established a downtrend move. All that is needed to confirm this is a break of the double bottom at $3,190. This support will not be easy to break as volume is strong here, so expect some failures. Once broken, it is time to go short in our opinion with the next target support at $2,881. 

AMZN 1-day chart

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