Amazon (AMZN) Technical Analysis Hints At Corrective Trend
The technical analysis of Amazon's (AMZN) stock gives an indication that a corrective trend may be under development. According to the charts, Amazon stock has formed a zigzag-shaped price action consisting of a-b-c (sub-waves). So by the end of 2022, the first major wave (A) of Amazon stock will be complete. In case you don't know, it is classified as a bullish impulse wave (5 waves).
And once this impulse wave in Amazon stock ends, the stock prices will start to decline. This will be the start of a bearish correction marked as wave (B). Overall, we will witness A-B-C waves in a zigzag fashion.
In the near future, there's a high chance that the depreciation of the US stocks will continue since it falls under the intermediate wave 5. In addition, the leading diagonal is around 77.07 in relation to wave A. Once wave (A) ends, the next step will be the growth period in the stocks.
If we look at the second option, where the markets complete the primary wave (A) formation, it will lead to a diagonal price action consisting of 1,2,3,4 and 5.
We can assume that the correction wave marked as B will turn into the W, X, and Y waves. In these waves, the (W) wave will be the active one.
Fundamental Analysis Of Amazon
Now that we understand what's going on with the technicals of Amazon (AMZN) let's not forget about what's happening on the ground. The year 2022 was very harsh for tech stocks in general, and Amazon was no exception. The company is no longer enjoying the e-commerce boom it witnessed at the height of the pandemic. This has led to poor sales and revenue for the company.
In addition, the company also had to slow down hiring and even had to lay off the workforce. So, in short, the economic landscape is very harsh for the Amazon as well as other tech companies.
So the next time you look at the technical analysis of Amazon (AMZN), also remember to look at the fundamental and economic landscape.