Amazon has changed the game for internet shopping. This post will address Amazon (AMZN): Will the Stock Continue Higher or Consolidate? Since it peaked at just north of $2,000 in September of 2018 it has been in a range from $1300 to its previous mentioned highs. We will look at the stock using the fundamental markers I use to see if a stock can currently be labeled a growth stock. We will also look at a couple of technical setups Amazon is in or am waiting to initiate based upon the way I trade.
Amazon (AMZN): Will the Stock Continue Higher or Consolidate? – Fundamentals
There are 7 fundamental markers I look for in a stock. I try to only purchase growth stocks so these are the parameters I look for to see if a stock meets the majority of the markers. I prefer to have all seven fulfilled. You can it more in depth here: https://evancarthey.com/how-to-scan-for-winning-stocks-an-insiders-view-to-my-process/
- Market Cap: > $300 million
- EPS growth past 5 years: >0%
- P/E: Over 10
- EPS growth next 5 years: >0%
- Sales growth past 5 years: Over 20%
- Debt/Equity: <0.1
- Sales growth qtr over qtr: Over 5%
Does the stock meet these 7 markers?
- Market Cap: 847.88B (YES)
- EPS growth past 5 years: 102.00% (YES)
- P/E: 73.11 (YES)
- EPS growth next 5 years: N/A
- Sales growth past 5 years: 25.60% (YES)
- Debt/Equity: 0.51 (NO)
- Sales growth qtr over qtr: 17.00% (YES)
I used Finviz.com for the fundamental analysis screener.
Amazon is extremely close to being considered a growth stock. The only market it didn’t meet was the Debt/Equity ratio but it is still pretty good. For some reason the EPS growth the next 5 years wasn’t available but it probably would have been positive. This is definitely a stock I would look to purchase if it fit my technical setups.
Technical Analysis
In this setup we are using the 127 Long Trade Setup. We are waiting for price to retrace to the top pink line at 1570.29 for the trade to initiate. Once it does then the exit is the top of the teal box around 1630. But if the ext is not hit and price moves down and hits the 2nd pink line at 1468.39 then the exits move to the top of the blue box at around 1562. If price does not hit that exit and moves down and hits the bottom pink line at 1307.99 then the exits move to the top of the green box at around 1432.
That is the final time your exit will move. Even if price continues to move lower you do not move the exit. If an exit is hit then the move is over. So if you have any entries unfulfilled you then remove them and do not look to get in. Once an exit is hit then it is time to look for a new setup.
If you are looking for a quicker trade then the 1-hour time frame currently has a 127-161 Long Trade Setup. Price has blown through all of the entry levels so right now it is a “free trade.” What I mean by that is if you enter now at around 1733 then your final exit will be higher than that even if the stock moves lower. The exit is the top of the green box around 1762. If price continues to move lower before hitting 1762 then you can get in at better prices. That is the final exit and does not move lower.
Conclusion for Amazon (AMZN): Will the Stock Continue Higher or Consolidate?
Amazon (AMZN) is a great stock to trade. Their fundamentals are very strong so that means the technical setups shouldn’t be an issue. A problem I’ve run into in the past is if a company has horrid fundamentals then the technical setups may not work. With Amazon right now you do not have that concern. It is a stock that is on my radar to trade. The stock could be in a range but that would still create some really nice setups to trade.
Popular Links
Here are a couple of links if you are looking at how I view the market and some trade setups. You can create your own trading style and setups. Quit paying losing traders to teach you. The only thing they teach is how to lose money.
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My Robinhood Review: https://evancarthey.com/review-robinhood-trading-service-with-no-fees-part-1/
