Tuesday, 17 May 2016

AMZN - what a bargain, yes?

With the broader market closing broadly lower, there was similar weakness in Amazon (AMZN), which settled -2.2% @ $695.00. Near term outlook threatens the $650s, where the 50dma will be lurking in early June. If the main equity market gets smashed this summer... the Feb' low of $474 will not hold.

AMZN, daily

AMZN, monthly


*special highlight for the monthly chart... if AMZN can close May <659, that will make for a red candle, with a VERY bearing topping spike.

If that turns out to be the case.. it bodes for massively lower levels this summer.

Suffice to add... AMZN is one of the few remaining momo stocks that hasn't been smashed lower by the increasingly intolerant and demanding equity market.

The current valuation is clearly insane... with even more conservative analysts still projecting an overly generous PE in the 70s.

I will highlight what might become an infamous lunch time moment on clown finance TV...

Ms. Stephanie 'I have to chase AMZN at $700' Link. She did note at the time AMZN was valued on the high end.. , but that she felt compelled to get involved around the $700 threshold.

Compelled... indeed.

*to be clear, I like the company... superb service (does anyone not use AMZN these days?).. but from a pure valuation perspective.. AMZN could fall to $350/300, and it'd still be arguably over-valued - relative to its current minuscule net profit margin of around 1%.

I shall be watching AMZN across the summer for purely entertainment reasons.

I have ZERO intention to short it... as its a momo stock.. and they are overly problematic to trade.