Amazon lagging behind the spy: can the stock catch up in 2022? Technical Analysis – Amazon (AMZN)

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Despite Amazon.com, Inc (NASDAQ: AMZN) holding an index weight of 3.9% in the SPDR S&P 500 (NYSE: SPY), the stock has moved inversely to the ETF over the past two trading days.

On Monday, when the SPY gained 1.42% from the December 22 closing price, Amazon fell 0.8%. On Tuesday, the SPY consolidated by trading mostly flat while Amazon rose nearly 1.5% at one point.

Amazon has dragged the SPY through 2021 and is currently trading up around 5% since the market opened for the year on Jan. 4 compared to the SPY, which has climbed around 27% more since the market opened for the year on Jan. 4. beginning of this year. Amazon could be on the verge of catching up next year, and on December 13, Cowen analyst John Blackledge called the stock the top pick of mega-cap and the best idea for 2022.

Around the start of February, Amazon will print its fourth quarter and full year 2021 results and traders and investors will be watching to see if the stock hits the event. If any information is released suggesting that Amazon has generated better-than-expected revenue during its holiday sales events, investor sentiment could turn bullish, especially after Amazon shifts to fourth-quarter revenue of between $ 130 billion and $ 140 billion, which missed the consensus estimate of $ 142.1. billion.

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The Amazon chart: Amazon is holding above a long-term ascending trendline, which has served as support since October 1. On Tuesday, the stock tested the trendline for support and rallied from the level, showing that the bulls bought the downside.

Amazon action is working to imprint an interior bar pattern on the daily chart, with all of Tuesday’s price actions occurring within Monday’s trading range. The inside bar is bullish because Amazon was trading higher before forming the pattern and the bulls and bears can watch for a break up or down from the pattern on Wednesday to gauge future direction.

The daily trading volume of stocks indicates consolidation, which is the theory behind an inside bar. As of mid-afternoon, around 1.89 million Amazon shares had traded for a 10-day average volume of 3.02 million. When Amazon breaks with the inside bar setup, traders will want to watch the volume increase to confirm that the formation has been recognized.

Amazon is trading slightly above the eight-day Exponential Moving Average (EMA) but below the 21-day EMA, which is bearish. The stock is also trading below the 50-day simple moving average, indicating that long-term sentiment is bearish.

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  • Bulls want to see big bullish volume come in and break Amazon from the inside bar setup, which would help the stock regain moving averages as support. Amazon has higher resistance at $ 3,444.15 and $ 3,497.51.
  • The bears want to see a big bearish volume come in and push Amazon down below the ascending trendline, which could indicate that a bear market is looming on the horizon, at least in the short term. Amazon has psychological support below at $ 2,400 and support in the form of a price history at $ 3,326 and $ 3,230.98.
  • See Also: Read Why Monness Crespi Is Bullish On Amazon
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