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AMZN Pullback: Correction or Discount Buy?
29 Nov
Summary
- Amazon stock dropped over 15% from recent highs.
- Technical indicators suggest a cooling phase, not collapse.
- Fundamentals remain strong with growing margins and cash flow.
Amazon's stock has seen a significant pullback, shedding over 15% from its record highs near $260 in recent weeks, now hovering around $215. Despite the sharp decline, the stock has not broken key technical support levels, and momentum indicators are showing improvement. This correction, while steep, appears to be driven by a broader market sentiment shift, particularly affecting tech stocks.
The current drop places Amazon's stock in correction territory, but the technical setup suggests a healthy cooling phase rather than an impending collapse. Crucially, trading volumes during the decline have been moderate, with higher volumes on upward price movements, indicating a lack of panic selling. All major moving averages and trend lines remain intact, providing a stable technical foundation.
Amazon's fundamental strength, underscored by its latest earnings report, supports a positive outlook. The company's diverse revenue streams are performing exceptionally well, with margins trending higher due to cost discipline and automation. Continued growth in cash flow and a dominant market position in multiple sectors solidify its status as a $2.5 trillion growth story with substantial future potential. The recent price dip has also made the stock more attractive to investors.
