(AMZN) Stock Ready for a Breakdown?

A key support level has formed in the chart of (AMZN).  If this level is broken, a breakdown is expected… (AMZN) is a leading online retailer and one of the highest-grossing e-commerce aggregators. The company’s offerings also include Amazon Web Services’ cloud computing, storage, database, and advertising services.

The company has been gaining on more Prime subscriptions due to a coronavirus-led spike in online orders. In addition, AMZN is seeing strong adoption of AWS through expanding its AWS services portfolio, though the company is seeing increased cloud competition.

AMZN had $84.4 billion in cash as of the end of the year with a current ratio of 1.1. It also has a high return on equity of 22.8%. The company has a very strong history of growth with earnings growth averaging 102% over the past five years. Earnings are expected to rise 87% year over year for the current quarter.

All that growth has led to a high multiple as AMZN has a trailing P/E of 71.73 and a Price to Book of 15.9. While the stock has shown positive long-term momentum, its performance this year has so far been bearish. This has led to a Momentum Grade of C in our POWR Ratings.

Take a look at the 1-year chart of AMZN below with added notations…

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