Amazon.Com Inc. - (AMZN) - September 27, 2023
Last month, Amazon.com (AMZN) returned to the green favored zone of the SIA NASDAQ 100 Index Report for the first time since November of 2020, after spending most of the intervening three years stuck in the red zone. The party didn’t last long, however, and yesterday, AMZN dropped back into the Yellow Neutral Zone, confirming that a relative strength uptrend that started back in May has ended. AMZN finished Tuesday in 31st place, down 5 spots on the day and down 13 positions in the last month.
Depending on whether you think of Amazon.com as more of an Internet company or a retailer, potential Green Zone replacements include Booking Holdings* (BKNG) and Mercadolibre (MELI) in the SIA NASDAQ 100 Index Report; Walmart (WMT) or Costco (COST) in the SIA S&P 100 Index Report, or Dollarama* (DOL.TO) and CGI Group (GIB.A.TO) in the SIA S&P/TSX 60 Index Report. A spring/summer rally in Amazon.com (AMZN) appears to have come to an end with the shares staging a significant downturn this month. Earlier in September, the shares ran into resistance at the August 2022 peak near $145.00 and failed to get through that level. Since then, the shares have been backsliding, with a breakaway gap down under the 50-day average signaling that bears have gained the upper hand.
Downside support may next emerge between an uptrend line near $107.50 and the 200-day moving average near $112.50. Initial rebound resistance may appear near $135.00 where the 50-day average and the top of the recent gap converge.
*Shares of Booking Holdings and Dollarama are currently held in portfolios managed by SIA Wealth Management.
Earlier this month, a summer rally in Amazon.com (AMZN) shares ran into a wall of resistance near $146.40, where the shares failed to break through a downtrend line or top their August 2022 high. Since then, AMZN has turned decisively downward, completing a bearish Double Bottom breakdown that caused a bullish catapult to fail and signaling the start of a new downtrend.
Based on previous column highs and lows, initial downside support may appear near $120.10, or $110.95, followed by $100.50 based on a horizontal count and a test of the $100.00 round number. Initial resistance on a bounce appear near $137.95 based on a 3-box reversal.
With its bullish SMAX dropping to 6, AMZN is exhibiting strength against the asset classes but that could change if the relative strength continues to deteriorate.
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