A rotation into large-cap tech and several FAANG stocks -- Facebook (FB) - Get Report , Amazon (AMZN) - Get Report , Apple (AAPL) - Get Report , Netflix (NFLX) - Get Report and Alphabet (GOOGL) - Get Report -- is helping to give Amazon stock a lift. A further rotation could aid in its potential breakout.
More good news? Keybanc analysts slapped an overweight rating on the stock and $2,100 price target. From current levels, that implies more than 23% upside. Can it get there?
Trading Amazon Stock
After a quick snapback rally from its December lows, Amazon stock has been essentially trapped between $1,600 support and $1,700 resistance since January. This multi-month range has meant that Amazon stock has missed out on the continued upside we've seen in many stock and indices.
That's surprising given the momentum in tech stocks and specifically in cloud stocks, given Amazon's AWS unit. Either way, though, the name has been sluggish and we have to respect that price action.
With resistance just overhead near $1,709 and the 200-day looming at $1,729, Amazon could be poised for a large breakout should it power over these levels. While a $24 rally seems like a big move, note that that's less than 1% from current levels. A 1% or 2% move from Amazon -- far from unheard of for this name -- could unleash a flurry of buyers who have been waiting for this stock to regain some mojo.
There is the 61.8% Fibonacci retracement from the December lows to the September highs to be aware of. After that, though, this one could have some room to run, particularly if the broader market is cooperating.
Oddly, my one concern here is how many traders and investors seem to be watching these levels. With too many eyes on the same spot, sometimes stocks tend do the opposite of what everyone expects. That's not to say AMZN stock will or will not breakout over this level, but just something worth mentioning.
Of course, should it fail to breakout, investors would like to see $1,600 hold as support.
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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.