Amazon – Watching it BASE
It’s true that Amazon hasn’t done anything over the last 14-months and it has been a laggard relative to the S&P 500 since mid-summer 2020. But, really – and we know how precious relative performance points are – has the stock disappointed anyone over the time? Has it’s trend been damaged? Has it broken below key support? Has its 40-week moving average wavered?
The answer to each of the above questions is a resounding, “No.”
Rather, we believe it’s important to point out that the stock’s price action over the last 14-months is a BASE, momentum excesses that developed into the late summer of 2020 have since been ameliorated, and it’s performance over the last two months has been identical to that of the S&P. Heck, since early October 2021 AMZN is up almost 9%, 230bps better than the S&P.
AMZN plainly deserves the benefit of the doubt on the long side. We expect that it is going to break out, above its July 2021 high of 3773, and make a new all-time high. A breakout above 3773 will imply a target of 4500.
