Why Prime Day could be another ‘nothing burger’ for AMZN stock

Amazon (NASDAQ: AMZN) Prime Day is here, which is the premier savings occasion for Amazon Prime members for products across the e-commerce platform. 

In earnest, Prime Day is actually two days as it spans across July 12 and July 13, first introduced back in 2005. After the first 13 years of its existence, it reached 100 million users, and after three more years, it grew to 200 million members. 

Meanwhile, the sales event has been a success for the firm, so expecting it to continue in the same vein would not be a stretch. However, despite the buzz around the event, which is this year smaller than usual, AMZN closed in the red by 2.26% on July 12.

This development is not new, as historically, Prime Day has not done much for the price movement of AMZN stock. Meanwhile, Telsey Advisory Group believes “other competing retailers also responded strongly to win over online customers on Amazon Prime Day.”

AMZN chart and analysis    

Further, the company shares are nowadays trading at 68.2 times its 12-month forward earnings, well off of its five-year peak of $171.8; yet, it would be difficult to call the stock of the company cheap. 

Currently, the price of the stock is $109.22, and with a double bottom seen on the daily chart, the possible support lines could be around $108.69 as well as between the $105.37 and $106.22 levels.

On the other hand, if the stock rallies, possible resistance lines could stretch between $109.80 and $113.99 levels, moves above could see the stock rally to $116.46, the next resistance. 

In short, not much has changed in terms of TipRank’s analysis of the shares since the last time Finbold covered Amazon. The consensus is still a strong buy, with the average price for the next 12 months slightly rising to now $178.55, 63.48% higher than the current trading price of $109.22.

In the end, whether the stock is cheap could depend on how the company balances consumer weakness in their cloud business, as notable investment firms stated. 

Inflation, labor market tightness, and supply chain issues play a role when analyzing the company and deciding to invest or stick to the sidelines for now. 

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