Amazon shares have gapped significantly higher recently but a long red candle has formed on the 4-hour time frame, followed by a bit of consolidation. This suggests that selling pressure is mounting and that price might be ready to fill the gap soon.
If so, Amazon shares could trade down to $480/share before recovering to this week’s open around $560/share. The 100 SMA is still above the 200 SMA anyway, indicating that the longer-term climb could carry on.
However, RSI is moving down from the overbought zone, indicating that sellers are ready to push Amazon shares lower. Meanwhile, stochastic is on middle ground, barely offering any good clues at the moment.
Amazon Shares Outlook
Amazon recently announced its decision to adjust its Prime sharing policy, as executives reduced the number of accounts that can be shared with one member. Previously, each Prime member was able to share their account with up to four other people but the company decided that accounts can now only be shared with one other adult and four children, provided that the two adults must have access to the same credit cards.
For some analysts, this move could not have such a material impact on revenue, as the number of discouraged members closing their Prime accounts might just offset those opening new ones. After all, there are a number of other companies that are offering on-demand services similar to Amazon Prime.
In addition, news that the former Top Gear host Jeremy Clarkson will be heading over to Amazon could mean increased viewership and revenues for the company. Former co-hosts James May and Richard Hammond will be joining Clarkson’s new show, which is good for Amazon’s streaming service.
Further gains for Amazon shares could push prices past the $600/share barrier by the end of the year if the recent company changes are able to usher in better earnings data for Q3.
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