AMZN Is In for a Pullback
May 23, 2017
Amazon (AMZN) has traded well so far in 2017 – it’s actually been strong over the last ten years and counting – and while the retail space has been under pressure for much of this year, we’re nowhere near the end of this company’s success. As I mentioned in a previous article, Amazon is the bold and the brave. It never worried about the bottom line as it built its empire, and now that it’s completed, CEO Jeff Bezos is looking for the next opportunity.
Amazon is what I like to call a tech juggernaut: a giant conglomerate that has its tentacles in everything from consumer products to financial services to travel and more. Earlier this week it was reported that the company is looking to enter the pharmacy market. And I also talked in a previous article about it looking to pick up the pieces of the retail revolution by expressing interest in brick and mortar, even as many bet that the space is near extinction. Not me.
Those are only a few of the many things this company has going for it. Drone delivery has been a hot topic for some time now, and I expect AMZN will push it through soon, which will make an even bigger splash in its additional endeavors.
But despite its strength, there’s no question this stock can be volatile from time to time, and given its spectacular performance over the years I do have concerns about a near-term pullback due to a variety of issues, including valuation and a recent decline in earnings consensus.
In the end, I do love this company over time, and truly long-term investors that hold AMZN in their 401(k)s may want to weather the storm to ride the next leg higher. If you’re a more active trader, I’d probably look for a test of $900 – and then of $850 if that level doesn’t hold – as a possible entry point. Both are areas where the stock has support and has consolidated in the recent past.