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Amazon is setting up to outperform the broader S&P 500

Russell Shor Written by Russell Shor
  • AMZN.us
    (${instrument.percentChange}%)


Source: www.tradingview.com

Amazon (AMZN.us) has set up positively on a technical basis. The top candlestick chart shows the stock's 5-week EMA crossing above its orange 10-week EMA (black circle). At the same time the weekly RSI has moved above 50 (black rectangle), which is the bullish side of the indicator. If the EMAs develop angle and separation to the upside, and the daily RSI maintains above 50, an underlying bullish momentum will be supporting AMZN.us.

On a relative strength basis (bottom candlestick chart), the technicals are also looking promising. We consider AMZN.us/SPX500, where AMZN.us is the numerator and SPX500 is the denominator, as a relative strength (RS) chart. The RS's green 5-week EMA has crossed above its orange 10-week EMA (green circle) and its weekly RSI is also above 50 (green rectangle). This suggests that the numerator (AMZN.us) is outperforming the denominator (SPX500). If the EMAs develop angle and separation to the upside and the RSI remains above 50, this outperformance will continue.

Shares of AMZN.us have been positively buoyed by the company's strong Q3 earnings, which beat Wall Street expectations on 27 October. As we look ahead to the coming year, Amazon stands out as a potential success story for investors. Amazon Web Services (AWS) is poised for significant growth, North American operating income has exceeded expectations, the international business is approaching break-even, and revenue continues to maintain a robust double-digit growth trajectory. All these factors make Amazon a compelling choice for those seeking strong earnings growth in the market as we move into 2024.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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