Amazon Stock Slips: What's Next for Investors?

Amazon (AMZN) shares took a hit in extended trading on Thursday, following the tech giant's fourth-quarter earnings report. The stock's projected open on Friday sets the stage for a possible retest of a rising wedge pattern's lower trendline, with important support levels around $230, $216, and $200. If the stock resumes its longer-term uptrend, investors should monitor a measured move price target at $290.

Amazon's cloud computing revenue grew by 19% in the fourth quarter, but it fell short of analysts' expectations of $28.87 billion. Additionally, the company's revenue forecast for the first quarter also missed Wall Street expectations, with executives citing a significantly unfavorable impact from foreign exchange rates. This tepid outlook for the current quarter has likely contributed to the stock's decline.

Technical analysis of Amazon's stock chart indicates a bearish divergence between the price and the relative strength index (RSI), suggesting waning buying momentum. Furthermore, the stock has been trading in a rising wedge pattern since July 2023, and the recent projected lower open sets the stage for a possible retest of the pattern's lower trendline, which could lead to further price declines.

Key support levels on Amazon's chart sit around $230, $216, and $200. If the stock resumes its longer-term uptrend, investors should monitor a measured move price target at $290, which could serve as a potential profit-taking level.



In the face of Amazon's recent stock price decline, investors may be wondering what's next for the e-commerce giant. While the company's cloud computing revenue and guidance fell short of expectations, it's essential to consider Amazon's strong brand recognition, technological innovation, and diversified revenue streams. The recent stock price decline may present an attractive entry point for investors seeking to capitalize on Amazon's growth potential.

As Amazon continues to navigate the competitive e-commerce landscape, investors should keep an eye on the company's progress in its core businesses, such as e-commerce and cloud computing. Additionally, investors should monitor the broader economic conditions and their potential impact on Amazon's international sales and foreign exchange rates.

In conclusion, Amazon's recent stock price decline is a result of disappointing cloud computing revenue and guidance, as well as technical factors such as a bearish divergence and rising wedge pattern. While the company faces headwinds in its core businesses, its strong brand recognition and diversified revenue streams position it for long-term success. Investors should closely monitor Amazon's performance in the coming quarters and consider the broader economic conditions when making investment decisions.