Will Amazon Breakout Soon?
Amazon has been an interesting stock to watch over the past year or so. After producing negative earnings quarter over quarter for several quarters in a row, investors seemed to have lost faith in the stock late last year. However, the story has been completely different this year. The company showed positive earnings for their Q4 2014 report, causing a bit of excitement in the market. Also, with the release of their first quarter earnings report, the company showed that their cloud service was one that may prove to be incredibly popular. With all of that being said, today we'll take a close look at Amazon to see what we can expect from the stock moving forward; both in the short term, and in the long run. So, let's get right to it…
Where Will Amazon Go In The Short Run?
Any time I look at attempt to predict what's going to happen with a stock in the short run, I like to look at it from a technical standpoint. After all, if a trend can be identified, it's not likely that the trend will change directions over a short period of time. With that said, from a technical perspective, things are looking great for Amazon.
The chart above spans a period of the past three months from Amazon. As you can see, the stock traded relatively flat until little more than a month ago before a steep climb (which was caused by the release of Amazon's cloud service data). Since the climb, we've seen a bit of a change in momentum. The stock seems to be trading relatively flat. As a result, when looking at the chart, there's a clear depiction of a flag that has formed. As the flag moves forward, you can see that the spread between the top of the flag, resistance, and the bottom of the flag, support, is starting to narrow. This is generally what we see before a breakout happens. Considering the fact that there is a bullish flag depicted in the chart and that the spread between support and resistance is narrowing, I think that we can expect to see a breakout relatively soon that pushes the value of the stock even higher.
Where Is Amazon Likely To Go In The Long Run?
If you would have asked me this question 6 months ago, I would have said that the stock is likely to go down the tubes in the long run. However, today, I see things a bit differently. For me, it all revolves around the Amazon cloud service known as Amazon Web Service or simply AWS. With the release of the company's first quarter earnings report this year, we saw that the service was already a $5 billion per year revenue generator; and that's likely to grow rapidly. So, as we move forward, Amazon is pushing itself more and more into an integral part of the internet of things; which is likely to lead to incredible profits in the long run. While I still have my doubts about the company's management, I have to say, I think that things are likely to move in the positive direction in the long run. So, as a binary options trader, look for dips that are likely to lead to more uptrends; leading to profitable opportunities from call options!
What Do You Think?
Where do you think Amazon is headed and why? Let us know in the comments below!