Amazon's Bullish Technicals and Insider Sale: Why Now is a Buyer's Market

Jeff Bezos' recent $5.4 billion sale of Amazon stock—a pre-planned move—has sparked investor debate. While insider selling often raises eyebrows, a deeper dive into Amazon's technical indicators, market sentiment, and fundamentals reveals a compelling buy opportunity. Here's why the stock's upward trajectory remains intact.

The Bezos Sale: Context Over Concern

Bezos sold 25 million shares on June 27, 2025, as part of a pre-established trading plan announced in May 2025. This isn't a sudden panic exit but a strategic allocation of wealth to ventures like Blue Origin and philanthropy. Despite the sale, he retains 9.6% of Amazon's shares, reaffirming his long-term commitment. The transaction aligns with his history of using stock sales to fund ambitious projects while maintaining stakeholder confidence.

Critically, the timing coincides with Amazon's near-term technical strength, not weakness. Let's unpack why.

Technical Analysis: A Bullish Setup

Amazon's chart offers a textbook bullish case, with key indicators aligning to support a buy signal:

1. Moving Averages Confirm Uptrend:
2. The 200-day moving average (MA), a critical support level, is at $205.13. Amazon's current price of $219.39 is comfortably above this, signaling strength.

3. Short-term EMAs (5-day: $217.66, 10-day: $215.53) are also rising, reinforcing upward momentum.
   

4. MACD Shows Positive Divergence:

5. While the MACD line dipped to 3.99, the 4-hour timeframe shows bullish divergence, indicating underlying buying pressure.

6. The MACD histogram has been expanding, a sign of accelerating upward momentum.

7. Donchian Channel Breakout:

8. The stock pierced the $217.93 resistance level (Donchian upper boundary), a key technical milestone. A sustained close above this level could trigger a $242.52 run to the 16-month high.

9. RSI and Volatility:

10. The RSI (61.43) sits in neutral territory, far from overbought (70).
11. The ATR (Average True Range) of $5.17 signals moderate volatility, making stop-loss management manageable.

Entry Strategy: Buy above $217.93, with a stop-loss below $210.21. Target $221.11 (R1) first, then $225.49 (R2).

Declining Put Options: A Contrarian Signal

Put option activity further validates the bullish narrative. Key observations:

• Low Put Volume at Key Strikes:
• The $200–$220 strike puts—common hedging points—saw only 680–12,205 contracts traded, far below calls' activity.

• The $217.5 strike put, near current prices, had the highest volume (36,754 contracts), but this reflects hedging by institutions, not panic selling.

• Bearish Sentiment is Dormant:

• The put/call ratio is 0.9, below the 1.0 threshold indicating neutral-to-bullish sentiment.
• Extreme puts (e.g., $285 strike) have negligible volume, suggesting investors aren't pricing in catastrophic downside.

Conclusion: The options market is pricing in stability, not fear.

Fundamentals: The AWS Engine and Beyond

Amazon's technicals are underpinned by staggering fundamentals:

1. AWS Dominance:

2. AWS contributed 58% of operating profits in 2024, with 17% YoY revenue growth in Q1 2025 to $29.3 billion. Its margin remains robust at 39.5%.

3. AI and Infrastructure Bet:

4. Amazon's $24.3 billion Q1 capital expenditure reflects investments in AI (e.g., Trainium 2 chips) and delivery networks. A $4 billion expansion of Same-Day Delivery to 4,000+ U.S. cities by 2025 promises scalability.

5. Analyst Optimism:

6. The 12-month average price target is $243.24, with some analysts like JPMorgan forecasting $240+ on tariff relief and Prime price hikes.

Risks and Considerations

• Tariff Uncertainty: Rising Chinese import tariffs could squeeze margins, but Amazon's pricing power and scale mitigate risks.
• Valuation: At a P/E of 36.42, the stock isn't cheap. However, its growth trajectory justifies the premium.
• Competition: Microsoft and Google's cloud/AI advances are threats, but AWS's lead remains unchallenged.

Final Take: Buy the Dip, HODL the Trend

Jeff Bezos' stock sale is noise in a sea of bullish signals. Amazon's technical setup, declining put activity, and AWS-fueled growth make it a buy at current levels.

Action Items:
- Entry: Buy above $217.93 with a stop below $210.21.
- Target: $242.52 (16-month high), with a stretch target of $255 (per analyst estimates).
- Hold for: 12–18 months to capture AWS's margin expansion and AI monetization.

In a market obsessed with fear of insider selling, Amazon's fundamentals and chart tell a clear story: this is a stock to own, not fear.