Amazon Stock Fears the Highs and Pulls Back but AMZN Support Holds
Amazon’s stock was facing renewed selling pressure this week but has received fresh momentum from FED Powell's comments today.
Quick overview
- Amazon's stock is under renewed selling pressure despite positive developments in its grocery delivery service and optimistic analyst comments.
- After a disappointing reaction to its second-quarter earnings report, AMZN shares have dropped nearly 5% this week, testing key support levels.
- The company is aggressively expanding its grocery delivery service, aiming for 2,300 cities by 2025 and offering free same-day delivery for Prime members.
- Investor sentiment remains cautious, with analysts suggesting that enthusiasm for Amazon's growth initiatives has not yet translated into improved stock performance.
Amazon’s stock was facing renewed selling pressure this week but has received fresh momentum from FED Powell’s comments today.
From Post-Earnings Weakness to Lingering Doubts
Amazon entered August on shaky ground after its second-quarter earnings report. Despite exceeding Wall Street expectations, the stock quickly gave back gains as cautious forward guidance and fading enthusiasm after results weighed on sentiment. Shares tumbled nearly $25 in late July, setting the tone for a choppy trading month.
This week, sellers returned in force as broader market sentiment soured, dragging AMZN down nearly 5% over the week. On the daily chart, the stock is once again testing the 50-day simple moving average (SMA), a key support that has repeatedly provided stability in recent months.
AMZN Chart Daily – The 50 SMA Held as Support
However, technical signals remain fragile. The stochastic indicator continues to trend lower, raising the possibility of a sustained break beneath the 50 SMA. Should that occur, the next major downside levels to watch sit near $215 and $200, which could define the medium-term floor.
Amazon’s Fresh Delivery Push
In an effort to regain investor confidence, Amazon announced a rapid rollout of its grocery delivery service, aiming to reach 2,300 cities by the end of 2025, with over 1,000 locations offering same-day delivery. The company also scrapped its $9.99 monthly grocery delivery fee for Prime members, opting instead to provide free same-day delivery on orders above $25.
While these moves signal aggressive expansion and an effort to tighten Amazon’s grip on consumer spending, investors appear unimpressed so far. Analysts note that despite the logistical progress, enthusiasm has not translated into meaningful stock performance, suggesting traders are waiting for clearer earnings growth before re-rating AMZN higher.
Outlook: Amazon remains caught between ambitious growth initiatives and investor caution. The company’s expanded delivery network could provide long-term support, but for now, technical pressure dominates the conversation. If AMZN holds the 50 SMA, a rebound could form, yet a decisive break lower risks opening the door to deeper losses. The coming weeks may prove pivotal in determining whether sentiment stabilizes—or if the stock remains an underperformer among big tech names in 2025.
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