Think it’s time to buy Amazon ($AMZN)? Watch this before you do. – July 30, 2021
AMZN
I want to look at Amazon ( NASDAQ: AMZN ) today. As you probably know, if you trade stocks, Amazon ( NASDAQ: AMZN ) fell pretty decently, 7.5 percent on earnings that the market didn’t like much. It was really, from what I can see, kind of more on guidance. I think it is ultimately a buying opportunity. However, not really as a trade.
That potential trade was, first thing this morning though, on a percentage basis it wasn’t that big of a move. On a point basis, if all you are counting is dollars, from the open the stock moved up $21.00 before it ultimately fell back. From the open it moved down almost $40.00. Breathtaking. But on a percentage basis the thing basically flatlined. It just basically flatlined all day long. So this was a trade that really didn’t turn out to be a good trade.
I want you to look at the way this is on a weekly basis. You can say, oh wow, what a great uptrend. Yes, that’s fine, but look at all of the periods when the stock was in this sideways range here, even here. Here, all of this, and then here. And so the question you have to ask yourself is, is this the kind of stock I want to be trading?
My suggestion would be, no, not really. Look, it costs a bazillion dollars for one thing, $3,300.00 a share. For a lot of people it’s like you are on the iPhone, Robin Hood, Vald the new billionaire account with the confetti every time you buy a teeny tiny fraction of a stock. Hey, I spent $30.00 and I own Amazon ( NASDAQ: AMZN ) now. Fine, you go ahead and trade it. But for the rest of us, this is a stock that you are either going to be holding or you are really not going to be involved in it at all, one of the two. That’s the way I look at it anyway.
Now, there are millions of people that would disagree with me and that is totally fine, you are entitled. I would just say this if we look at the daily chart, the time to really be buying Amazon ( NASDAQ: AMZN ) is twofold, first kind of like right here, sometime in the next few days as it bounces along the 200-day moving average, which it has done for a while before.
So it’s like every time it hits the 50-day moving average it recoils like you just put your hand on a hot stove. No, it farts around there for a while but then ultimately it moves up. The 200-day moving average hasn’t truly been moving lower since I don’t know when. So this is tending to be a good time to be buying the stock.
On a fundamental basis, I won’t go into big detail on it, but just kind of looking at the MarketSmith fundamentals, this is the earnings per share increase versus the same quarter the prior year. This is the revenue versus the same quarter the prior year. And then finally, this is the profit margin. So we want to see all of these going up. Well, they basically are all going up, little fits and starts here and there but they are all kind of going higher.
My point is, as long as you are seeing this type of thing this stock is good to go. It is one to own. I just really wouldn’t be trying to trade it right now. I just think there are easier trades out there, that’s really what I am saying. But if you are an investor, if you have been looking for a time to buy Amazon ( NASDAQ: AMZN ) this could be your start for a starting position. Literally just waiting for the stock to firm up a little bit, you are probably going to be in for the long haul though.
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