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Amazon Inc (US) - Weekly

By Minipip
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Amazon stock could perform well over the coming months/year as a stock buyback and a stock split has been announced.

Overview

Amazon Inc (NASDAQ: “AMZN”) is an online E-commerce and cloud computing company. Just recently the company has announced a stock buyback and a stock split. Both of these could have a positive impact on the stock over the medium and long term. In the short term, Amazon has seen a 5% rise on this news, however with the geopolitical issues and inflationary stats, this could be short-lived.

Financials

The financials of Amazon are really good. The total market cap currently sits at about $1.48tr. A full report can be found here.

Technicals

From a technical aspect, Amazon is mixed. Support for the stock sits about 18% below its current level (the blue line) for the long term outlook. with headwinds and sanctions in place from Russia, earnings could be missed and given the past history of misses on Amazon, the stock can fall hard. In the short term support for Amazon sits at $2,500 followed by the blue trendline at $2,280. If Amazon broke this, then $2000 could be on the cards, though this is unlikely. Looking towards the upside, initial targets are $3,000. A nice weekly close above here could set the stage for the stock to rally towards $3,160, then $3,240 and then the highs of $3,750. A break above here aims for $4,000.00. MACD still trends strongly negative and RSI is reading 38, suggesting a bearish bias at the moment, but this could change if investor sentiment picks up soon.

Summary

Amazon announced a stock split of 20-1, meaning for every stock owed of Amazon, each investor will get an additional 19 shares. Given its current price, this means each share would be now worth $139.28. This will allow more investors to hold Amazon’s stock potentially making it a higher demanded stock. (Tesla did this a few years back and saw stellar demand). Further, a buyback of $10bn means that Amazon will be buying $10bn of their own stock, back off the markets, thus lowering the supply of their stock available to trade, increasing demand. The stock split is due 3rd June 2022.


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