Amazon.com (AMZN) Falls Further As It's Water-Logged And Getting Wetter

Trade-Ideas LLC identified Amazon.com (AMZN) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Amazon.com

(

AMZN

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Amazon.com as such a stock due to the following factors:

  • AMZN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 billion.
  • AMZN has traded 5.6 million shares today.
  • AMZN traded in a range 202.4% of the normal price range with a price range of $23.95.
  • AMZN traded below its daily resistance level (quality: 8 days, meaning that the stock is crossing a resistance level set by the last 8 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on AMZN:

Amazon.com, Inc. operates as an online retailer in North America and internationally. It operates through the North America, International, and Amazon Web Services (AWS) segments. AMZN has a PE ratio of 948. Currently there are 23 analysts that rate Amazon.com a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Amazon.com has been 4.2 million shares per day over the past 30 days. Amazon.com has a market cap of $315.6 billion and is part of the services sector and retail industry. The stock has a beta of 1.49 and a short float of 1.8% with 1.65 days to cover. Shares are up 114.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Amazon.com as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:

  • AMZN's revenue growth trails the industry average of 45.5%. Since the same quarter one year prior, revenues rose by 23.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.66, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • Net operating cash flow has increased to $2,610.00 million or 47.70% when compared to the same quarter last year. Despite an increase in cash flow, AMAZON.COM INC's average is still marginally south of the industry average growth rate of 53.50%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet & Catalog Retail industry and the overall market on the basis of return on equity, AMAZON.COM INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Powered by its strong earnings growth of 117.89% and other important driving factors, this stock has surged by 121.11% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.

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