Over the last few years we've sure seen some truly crazy times where the market - or an individual stock, has soared on baseless rumours, mass delusion, or nothing less than mass hysteria (such as those social media IPOs). Yet here we are again, one of the worlds biggest online retailers posted lousy numbers, and the stock soared.
AMZN, weekly
AMZN, daily
In terms of stock price, AMZN is now in a very strange place. For some time to come, 'technicals' are arguably pointless to consider. Clearly the giant bear flag on the weekly cycle has been nullified, and the daily chart now just looks plain bizarre. Doubtless a lot of the rise on Friday would have been short covering 'at any price'.
Amazon...losses to come?
First, see this excellent posting on Zerohedge.com- Amazon Surges on Collapsing Margins...
The comments are also especially worth reading!
So the truth is that AMZN's operating margins actually declined even further to just 1.5%, compared to 3.2%, and this is a 'blowout number'?
see: stats (although Q1 data not yet listed): http://finance.yahoo.com/q/ks?s=AMZN+Key+Statistics
With a weaker economy - which is already the case in both Japan and across the EU, AMZN is going to suffer. With weaker sales, and slightly higher input & operating costs, it won't take much for it to start posting huge losses. For the moment, anyone who recently shorted AMZN has just got nailed.
Given a few more quarters though, I'm still looking for AMZN to start posting losses.
