Amazon.com, Inc. (AMZN) missed earnings per share (EPS) estimates when it reported results after the closing bell on April 30. The stock made its intraday high of $2,475.00 to the close on the 30 April, but has declined to $2,256.38 4 May, remaining above its monthly value level of $2,212.91. I did not show a risk level at this time.
The giant of online commerce has missed EPS estimates in three of the last four quarters. CEO Jeff Bezos has said that Amazon’s revenue stream will be used for upgrades to the company’s massive infrastructure and platforms. The stock is not cheap, as its P/E ratio is high at 113.12 without offering a dividend, according to the trends.
Amazon stock closed last week at $2,379.81, an increase of 28.8% year-to-date and in bull market territory at 46.3% above its March 16 low of $1,626.03. The stock is only 3.9% below its April 30 high of $2,475.00. Amazon had been trading around its 200-day simple moving average until March 23. Before breaking above this average, now at $1 894.83, the stock stabilized around its annual value level of $1,777.70. It has been a magnet between 9 March and 19 March.
The daily chart for Amazon
Refinitiv XENITH
The daily chart for Amazon indicates that the stock has moved sideways over the past 52 weeks, the follow-up of its 200-day simple moving average now at $1,895.83. The stock gapped higher on Jan. 31 on a positive reaction to the earnings reported after the close on Jan. 30. This has opened the way for a quick spike to a high of $2,185.95 game Feb. 11.
The stock gapped below its semi-pivot to $2,078.34 on Feb. 24 and then fell below the 200-day simple moving average at $1,851.43 on March 11. After trading as low as $1,626.03 on 16 March, the stock has found the key levels to the upside.
Amazon stock is back above its annual pivot at 1,777.70 on March 18, and then moved above its 200-day simple moving average on March 23. The semi-pivot to $2,078.34 was taken on the 13th of April. The quarterly pivot at $2,188.74 has been taken up on the 14th of April. The stock is now above its monthly value level for May, to $2,212.91.
The weekly chart for Amazon
Refinitiv XENITH
The weekly chart for Amazon is positive, with above its five-week modified moving average of $1,184.64. The stock is well above its 200-week simple moving average, or the return to the average, $ 1 431.80, which has not been tested in the past five years.
The 12 x 3 x 3 weekly slow stochastic reading is finished the last week, an increase of 77.78, from 73.26 on the 1st of May. The stock will soon become overbought with a reading above 80.00.
Trading strategy: Buy Amazon shares on the weakness of the monthly, quarterly, semiannual and annual value levels to $2,212.91, $2,188.74, 2,078.34, and $1,777.70, respectively.
How to use my value levels and risky levels: The closing price on Dec. 31, 2019, were inputs to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.
The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of May was established based on the April 30 close. New weekly levels are calculated following the end of each week, and new quarterly levels occur at the end of each quarter. Half-yearly levels are updated in the middle of the year, while the levels remain in play throughout the year.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.
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Source: investopedia.com
