Amazon stock has been on a steady climb since the start of the month yet it looks like the rally might come to a halt. Price is currently testing the long-term 200 simple moving average, which has held as a dynamic resistance level in the latest test.
Additionally, the 50 SMA is moving below the longer-term SMA, which suggests that the downtrend could continue. In that case, Amazon stock could move back down to its previous lows around the $290/share level.
Amazon Stock Forecast
RSI is indicating overbought conditions, which suggests that the recent climb is about to turn. MACD is still heading higher though, which could mean that there’s a bit of buying pressure left for a move past the 200 SMA.
If that happens, Amazon stock could be in for more gains as an upside break might signify the start of an uptrend. This could push prices up to the $365/share area, which is around this year’s highs.
Consolidation between the two SMAs is also possible if price stays stuck in range. The path of least resistance could be to the upside though, as the company’s move to extend cloud-computing dominance might mean more revenue for Amazon and gains for share prices.
Amazon stock has received a boost from this week’s announcement that the company would release 442 new products for its global network of computers and software, a 60 percent rise from all of 2013. It later raised that number to 449, including faster ways to write and publish software.
“Ninety percent of our development is deep, sophisticated corporate users telling us what to build next,” said Adam Selipsky, the unit’s vice president for products. “Two years ago, public clouds were maybe 2 percent of all computing workloads,” said Lydia Leong, a senior analyst at Gartner. “Now they are more than 10 percent. By 2018, it will be more than 50 percent.”
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