Amazon Stock Trades At New 52-Week High: Book Profits Or More Upside Ahead?

Amazon.com Inc AMZN stock just hit a dazzling new milestone, crossing the $2 trillion market cap for the first time ever on Wednesday.

The stock has now joined the elite ranks of Microsoft Corp MSFT, Apple Inc AAPL, Nvidia Corp NVDA and Alphabet Inc GOOG GOOGL.

Amazon's stock has been on a tear, up 27% year-to-date and a whopping 130% since the beginning of last year. With the AI-driven tech rally in full swing, can Amazon keep the momentum going?

The Power Behind the Surge

Amazon's incredible performance isn’t just a fluke. A blend of robust financial results and strategic positioning in the AI sector has propelled the stock skyward. Here's a closer look at what's driving this powerhouse:

• AI Frenzy: The surge in AI interest has significantly boosted Amazon, especially through Amazon Web Services (AWS), a leading AI product provider.
• Record Profits: Amazon smashed its Q1 records with a $10.4 billion net income, a dramatic turnaround from the $3.8 billion loss in Q1 2022 and a solid improvement over the $3.2 billion profit in Q1 2023.
• Leadership: Under CEO Andy Jassy, Amazon has not only weathered market challenges but thrived, leveraging growth opportunities effectively.

Also Read: Amazon To Challenge Shein And Temu With New Bargain Site: Report

Technical Indicators Flash Bullish

Amazon's stock price at around $194 is backed by a slew of bullish technical indicators:

Chart: Benzinga Pro

• Exponential Moving Averages (EMA):
  • Trading above the 5, 20 and 50-day EMAs signals strong buying pressure and a bullish trend.
• Simple Moving Averages (SMA):
  • 8-Day SMA: Amazon stock price trading above the 8-day SMA at $187.79 indicates a short-term bullish signal.
  • 20-Day SMA: The stock also lies above the 20-day SMA at $184.75 – reinforcing the short-term bullish trend.
  • 50-Day SMA: The price also trading above the 50-day SMA at $183.38, reinforces a short-to-medium term bullish signal.
  • 200-Day SMA: The price is significantly above the 200-day SMA at $161.35 – giving out a strong long-term bullish signal.

Chart: Benzinga Pro

• MACD Indicator: The MACD indicator at 2.15 suggests bullish momentum, reinforcing bullishness.
• Relative Strength Index (RSI): The RSI at 67.20 is close to overbought territory, but still supports further gains.
• Bollinger Bands: 20-Day Band: The stock is trading within the upper bullish band.

Is There More Steam?

The technicals paint a rosy picture for Amazon. With the stock comfortably above key moving averages and strong MACD readings, the bullish trend looks set to continue.

However, the RSI hints at near-overbought conditions, suggesting a need for cautious optimism.

Amazon's rally to new heights is underpinned by solid fundamentals and strong technicals. While the bullish indicators suggest further upside, investors should stay alert to potential pullbacks. As AI and innovation continue to drive Amazon forward, this stock could still have plenty of gas left in the tank.

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