Amazon.com, Inc. (AMZN) is the online shopping leader, but the stock has recently been challenged by numerous tweets sent out by President Trump. One important notion is that the U.S. Postal Service does not charge Amazon enough for last-mile delivery in locations where Fulfillment Centers are located.
Amazon proved immune to such concerns and is now a thriving retailer of almost everything we need. On April 26, the company announced that its first quarter earnings per share came in at $3.27, well above the estimates of $1.22 per share. The company's Amazon Web Services (AWS) division makes it the leader in cloud computing. AWS had net sales of $5.4 billion, up 49% year over year. This produced 10.6% of Amazon's total net sales.
This growth makes a rise in the Prime membership rate to $119 totally justified. The original prime rate was $79, which was raised to $99 in 2014. The new $119 rate takes effect on May 11, with Prime membership now exceeding 100 million consumers around the world. Amazon stock closed Wednesday at $1,569.68, up 34.2% year to date and up a bull market 24% since setting its 2018 low of $1,265.93 on Feb. 9. Following its earnings beat, the stock set its all-time intraday high of $1,638.10 on April 27. (See also: Amazon Offers More Prime Perks at Whole Foods.)
The daily chart for Amazon
The daily chart for Amazon shows my quarterly pivot at $1,446.99 as the upper horizontal line. This key level was a magnet between April 5 and April 25, when it was the launching ground for the positive reaction to earnings released on April 26. My monthly risky level for May is above the chart at $1,676.24 and above the April 27 high of $1,638.10. The stock is well above its 200-day simple moving average of $1,212.85.
The weekly chart for Amazon
The weekly chart for Amazon is positive, with the stock above its five-week modified moving average of $1,501.27. The stock is well above its 200-week simple moving average of $731.50, which is also the "reversion to the mean." The 12 x 3 x 3 weekly slow stochastic reading is projected to rise to 68.45 this week, up from 63.76 on April 27.
Investors should buy Amazon shares on weakness to my quarterly pivot of $1,446.99 and reduce holdings on strength to my monthly risky level of $1,676.24. (For more, see: Amazon: 10 Secrets You Didn't Know.)