Amazon.com, Inc. (AMZN) Prime Day 2020 this week seemed to lack the headline power of past events, with the stock dropping more than 200 points after a quick run-up on Monday. The sell-the-news reaction highlights the range-bound tape in place for the past three months, with the e-commerce juggernaut crisscrossing the $3,250 level, which marked the July 13 rally peak. This sideways action could persist into and through the Oct. 29 earnings report.
- Amazon stock may be “priced for perfection” after doubling off the March low.
- Political headwinds could undermine the uptrend in coming years.
- There is little technical evidence so far that the 2020 rally is coming to an end.
Classic market lore warns traders and investors the “bigger the move, the broader the base.” Amazon stock has posted an incredible 100% return since the March low, while 2020-to-date marks the best year in its 23-year public history, indicating that the stock may now be “priced for perfection.” In turn, this raises the odds for a long period of laggard performance, unless another super-catalyst like the pandemic alters consumer behavior.
The next presidential administration could also mark a key