Amazon Stock Dips: Analyzing Key Price Levels
Amazon’s stock recently experienced a decline following disappointing cloud revenue figures and a cautious sales outlook. Investopedia reports that this has set the stage for potential testing of critical support levels.
Cloud Revenue Miss
Amazon’s cloud computing division, AWS, reported a 19% revenue growth in the fourth quarter, reaching $28.79 billion. However, this fell short of the expected $28.87 billion. CEO Andy Jassy attributed the slower growth to inconsistent chip supplies from third-party partners. The company’s first-quarter revenue forecast also missed Wall Street expectations, influenced by unfavorable foreign exchange rates.
Technical Analysis: Rising Wedge Pattern
Since July, Amazon shares have trended within a rising wedge pattern. The stock has found support near the pattern’s lower trendline and the 50-day moving average multiple times. Recent trading sessions saw the stock approach the upper trendline without breaking out, leading to a bearish divergence signal.
Key Support Levels
- $230 Level: A crucial support area, though the stock might open below this level. It aligns with the lower trendline of the rising wedge.
- $216 Level: This level could provide support near previous peaks and troughs.
- $200 Level: A psychological support level, close to significant historical highs and lows, and near the 200-day moving average.
Measured Move Price Target
Using the measured move technique, investors can project a target price of $290 if the stock resumes its longer-term uptrend. This involves adding the depth of the rising wedge to the upper trendline.
Conclusion
Amazon’s recent performance highlights critical price levels for investors. Monitoring these levels can provide insights into potential buying opportunities. For further insights, visit Investopedia.
Call to Action: Keep an eye on Amazon’s key support levels and consider potential investment opportunities as the stock navigates these technical patterns.
