Amazon (NASDAQ: AMZN) shares have advanced above $3 230 at the beginning of October and the current price stands around $3 190. The technical picture implies that the price may advance above $3 300 this October but there are also some obvious risks when it comes to buying Amazon shares.Fundamental Analysis: Amazon is in an good position to grow both its retail business and its AWS cloud services segment
Amazon’s business continues to grow rapidly and the company became a supply channel for many consumers in the age of the COVID-19 pandemic. The company is in a good position to grow both its retail business and its AWS cloud services segment.
The revenues could easily grow 30% this year but everyone is wondering if Amazon stock is still “buy”?
Amazon continues with expanding its Go Grocery concept and the company opened another Amazon Go Grocery store in the Seattle area. With this concept, customers are able to shop without stopping at a checkout stand by scanning an app on their phone as they enter.
Another positive news is that Amazon is preparing to launch a new online platform for luxury fashion brands. The company is going to spend around $100 million on a marketing campaign which will certainly add new customers and increase revenues of Amazon.
It is also important to mention that Amazon unveils its first custom electric delivery vans, which are one of three models designed and built in partnership with Rivian. The goal of the company to reach 10K custom electric vehicles by 2022 and 100K vehicles on the road by 2030.
There are some obvious risks when it comes to trading Amazon(NASDAQ: AMZN) shares but as long the price of Amazon is above $3 000 this stock remains in the bull market. According to the latest news, analyst Daniel Kurnos raised Amazon’s price target from $3,675 to $3,800 and he sees the recent pullback as an “excellent” entry point.
At its current share price, Amazon could be a very good short-term investment with solid growth prospects. I said short- term investment because with $1.6T market capitalization this stock is overvalued in my opinion and represents opportunity only for short-term traders.Technical analysis: Amazon shares remain in a bull market
As long the price of Amazon is above $3 000 this stock remains in the “buy” zone and there is no indication of the trend reversal.Data source: tradingview.com
On this chart, I marked important resistance and support levels. The important support levels are $3 000 and $2 800, $3 300 and $3 500 represent the resistance levels.
If the price jumps above $3 300 it would be a signal to buy Amazon shares and we have the open way to $3 500. Rising above $3 500 supports the continuation of the bullish trend and the next price target could be located around $3 600.
On the other side, if the price falls below $3 000 it would be a “sell” signal and we have the open way to $2 900.Summary
This stock has been one of the market’s biggest winners in the last several months. The price of Amazon stock has advanced from $1 900 above $3 500 in less than six months and the current price stands around $3 190. There are some obvious risks when it comes to buying Amazon shares but the technical picture implies that the price may advance above $3 300 this October. Analyst Daniel Kurnos raised Amazon’s price target from $3,675 to $3,800 and he sees the recent pullback as an “excellent” entry point. Despite this, my opinion is that this stock is overvalued but it could be a good “buy” opportunity for the short-term traders who are trading with “stop-loss” and “take profit” orders.