Trading.biz analyst Rahul Nambiampurath has been closely following Amazon’s year-to-date performance.
As the AMZN stock picked up pace amid expectations of a robust Q1 2024 earnings report, several interesting numbers surfaced, making Rahul all the more optimistic that this e-commerce and cloud computing player will cross $200 by year-end.
Here is what the Q1 report revealed:
- Q1 EPS at 98 cents per dollar exceeded market expectations of 83 cents
- The Q1 revenue surged to $143.3 billion, again beating market expectations of $142.5 billion
- The cloud computing wing, AWS, also exceeded revenue expectations at $25 billion
- The operational income increased to $15.3 billion — a 200% rise hinting at strong profitability
- The net income tripled as compared to Q1, 2023
Looking ahead, the Q1 report hints at promising future growth, with the revenue guidance for the next quarter projected at $149 billion, a growth of 7% to 11%.
Amazon’s (AMZN) technical analysis
Turning to the technical analysis, Rahul examined Amazon’s daily price chart to gauge the stock’s potential movement in the short-to-mid-run. Currently, AMZN is trading at $179, marking a 6% increase week-on-week.
Amazon’s daily price chart: TradingView
The chart showcases growing strength. Despite trading inside the ascending channel pattern for a long time, AMZN managed to avoid breaching the lower trendline. On a longer timeframe, the relative strength index (RSI) indicator hints at a hidden bearish divergence, albeit weakening. Per this insight, Rahul expects AMZN to trade in a range for a while, with strong support at $167.44.
Rahul believes that an expected correction might be good news for the buyers. Midterm, a weekly close above the 50-day EMA (red line) can propel AMZN towards the upper trendline. The analyst even applied the Fibonacci retracement indicator using the recently realized swing low and a half-cooked swing high to locate the next resistance levels at $187.27, $193.77, and then $200.28.
Therefore, a road to $200 might follow for AMZN if it first crosses above $187. 27 with high volumes.
What other elements could work for AMZN?
The Federal Reserve hasn’t changed interest rates yet, sticking to the 5.25%–5.5% range. The unchanged rate cuts highlight possibilities surrounding rate cuts by the end of the year, a move that could be beneficial for Amazon, led by affordable business expansion and increased consumer spending patterns,” mentions Rahul.
Rahul believes that Amazon’s growth can propel logistics and supply chain firms like Zebra Technologies (ZBRA) and FedEx (FDX).
Also, Barton Crockett of Rosenblatt Securities has a “Buy” rating on Amazon, with a price target of $220, which aligns with Rahul’s expectations.
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