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Trends & Analysis
News

TJX announces strong sales, dividend hike

News

Who wins the S&P 500’s bank battle?

News

USD/JPY edges lower on economic data

News

Li Auto shares race ahead on upbeat earnings

News

Can anything stop NVIDIA?

News

Gold rises on soft dollar, geopolitical concerns

Asset Watch

Play the long game with Amazon?

 

Tuesday, March 14, 2023

After the collapse of Silicon Valley Bank elicited fears of another financial crisis, the S&P 500 has now given back most of its year-to-date (YTD) gains. Moreover, as contagion concerns increase investors’ anxiety, everyone is on watch for the next shoe to drop.
However, when good companies suffer from others’ bad behaviour, it’s often a buying opportunity for long-term traders. For example, Amazon is down sharply from its 2021 highs and has also lost the bulk of its YTD gains.
But, if the negativity continues, monthly support is present in the $80 to $82 range. The key levels are near the March, April and May 2018 highs, the June 2018 lows, the March 2019 and 2020 lows, as well as the December 2022 and January 2023 lows. This means the Big Tech breadwinner could provide long-term value if you’re willing to ride out the volatility.
Amazon Stock Chart Trading View

Amazon’s monthly RSI is near 39, and outside of the June and December 2022 lows, the metric is the most oversold since it hit 38 in November 2008. Therefore, with GFC-like negativity already present, Amazon may outperform similar stocks that haven’t suffered as much in recent years.

Amazon is also on pace for its 10th monthly decline in the last 12 months. And only during the bursting of the dot-com bubble did it suffer a lengthier stretch of drawdowns.

So, does Amazon offer long-term value here, or will the cheap get cheaper in the months ahead?


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