Amazon Stock Pullback: Bullish Trend Intact Despite Recent Decline
Amazon (AMZN) shares have recently experienced a pullback, though the overall upward trend remains intact. Fundamentally, the latest earnings report suggests resilience, with revenue and margins maintaining stability. Year-on-year net sales growth and double-digit expansion in the cloud business indicate strong core growth, not reliant on temporary factors.
The company's increased capital expenditures, particularly in AI and cloud computing, are pressuring short-term profit margins but are seen as strategic investments for long-term growth. Analysts note that these investments are restructuring revenue and optimizing future earnings potential. The market is closely watching the AI sector, with Amazon Web Services' computing power and self-developed chips like Trainium and Inferentia gaining attention.
From a technical perspective, the weekly chart shows Amazon's stock has not broken the upward trendline, indicating a consolidation phase rather than a reversal. The daily chart reveals an inverse head and shoulders pattern, with the neckline at 212.80 breached and the price holding above 200.30 on a retest, suggesting strengthened short-term bullish momentum. The first upside target is expected to break above 249.00.
Support levels are identified at 200.30 and 196.00, with resistance levels at 226.88 and 249.00. While some investment banks have adjusted price targets and ratings, leading to increased volatility, the market is not moving in a single direction. Short-to-medium-term traders are advised to focus on volume changes and key technical levels to make informed decisions, rather than reacting to news flow.