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Sunday, August 20, 2017 12:45:15 PM
https://amigobulls.com/articles/2017-08-18-amazon-com-inc-amzn-stock-is-heavily-oversold-should-you-buy-now
$AMZN
Amazon Stock is heavily oversold
The Amazon stock technical chart is flashing multiple encouraging signs. As we had covered in our "Top crossover trades for today', Amazon stock price is testing its 100-day simple moving average, a support line the stock hasn't breached even once in 2017. In addition to the strong support from the 100-day SMA, Amazon stock has also entered the oversold territory, as per the RSI (Relative Strength Index) indicator. The RSI reading for Amazon is currently 28.72, well below the oversold threshold of 30. To put it another way, Amazon stock could have bottomed out for now. The oversold signal is also supported by another popular technical tool; Bollinger Bands. Amazon stock price is currently trading close to the lower Bollinger band, which implies that a move higher could be just around the corner.
To sum up, Amazon stock price has been caught up in a correction following its latest earnings release. Just when it looked like the stock had bounced off the 100-day SMA, president Trump's comments sent the stock further lower to test the 100-day SMA once again. Given the over 11% drop in Amazon stock price from its pre-earnings peak, it's likely that most of the weak hands (booking profits) have exited the stock. Supported by encouraging technical signals, Amazon stock might have bottomed out for now. Hence, long term investors should use this dip to accumulate Amazon shares on the cheap.
Looking for fundamentally strong tech stocks? Check out Amigobulls' top stock picks from the tech sector, which have beaten the NASDAQ by nearly 140%. Interested in automotive stock? Then, we also have our top picks from the auto sector, which have beaten the S&P 500 by over 234%. If you're a trader though, you should check out our daily trading ideas section for daily, free updates on the latest crossovers and other popular technical signals.
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