Amazon (AMZN) released its second-quarter report on Thursday, delivering mixed results. While earnings per share exceeded expectations, revenue fell short of forecasts. The company attributed the sales decline to external factors such as the Olympics and news coverage.
Consequently, Amazon lowered its sales guidance for the third quarter, disappointing investors. This news sent AMZN shares tumbling, creating a significant bearish gap on Friday. The downward pressure continued into Monday.
However, a glimmer of hope emerged as buyers stepped in on Monday afternoon, halting the decline. While AMZN remains below its July peak by over 20%, the recent price action suggests potential stabilization.
Technically, AMZN has traded within a relatively narrow range since late 2023, indicating a balance between buyers and sellers. The recent drop has brought the price back to the lower boundary of this range, a level that has historically provided support.
– Advertisement –
The importance of psychological price levels cannot be overstated. The recent breakdowns below $200 and $190 highlight the market’s sensitivity to these round numbers.
Looking forward, AMZN may continue to consolidate around its current level, with resistance potentially emerging at the $166.66 mark. A false breakdown below $150 could also be a possibility.
Despite the recent challenges, Wall Street analysts remain optimistic about Amazon’s long-term prospects. The average price target for AMZN stands at $223.60, suggesting a potential upside of over 38%.
While the near-term outlook for AMZN is uncertain, the stock’s long-term fundamentals remain strong. Investors should carefully monitor price action and news developments for clues about the stock’s future direction.
FXOpen offers spreads from 0.0 pips and commissions from $1.50 per lot. Enjoy trading on MT4, MT5, TickTrader or TradingView trading platforms!
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
