Amazon's Prime Day Pullback Meets Bullish Golden Cross Signal
Every company has its own set of key performance indicators (KPIs), especially those in the United States' technology sector. However, there is typically one major indicator of future momentum and financial success that can be found within the largest companies in the market, and Amazon.com Inc. (NASDAQ: AMZN) is one of them, with a market capitalization of $2.3 trillion today.
Prime Day is a widely celebrated discount day among Amazon users, as it typically brings about discount windows that significantly boost the platform’s revenue and volume, not to mention brand awareness worldwide. With this in mind, investors can begin to connect the recent results emerging from Prime Day and the underlying price action in Amazon stock, as a deeper story is unfolding there.
On a technical and valuation basis, Amazon is poised to continue pushing for higher prices and offer investors additional upside potential down the line.
However, concerns are brewing as the ongoing tariff negotiations diminish the excitement and certainty that the company will be able to sustain this current momentum, a fear that is becoming more than just a thought with the recent Prime Day reaction.
A Different Prime Day This Time Around
Shares of Amazon were down by roughly 1.3% on one of the most anticipated days of the year, as reports indicate that Prime Day sales were down as much as 14% compared to last year's during the event's early hours.
While plenty of time remains to judge whether orders will come in during the rest of the week, most of the indication for the discount window and its performance is typically driven by the early hours of the launch. This contraction in order volume does not give markets a great deal of confidence that things will turn around.
However, bearish this may seem, it isn’t a huge reason for investors to remain concerned about the future of Amazon stock or the company itself. The comforting factor is that there isn’t necessarily something wrong with Amazon’s platform itself, but rather the prices in the overall industry, which are elevated due to ongoing tariff negotiations.
Because prices are now up for items and their shipping, especially those exposed to tariff rates, Amazon didn’t deliver on the usual discounts that users had come to expect, a reasonable explanation for sales being down 14% over the year. Recognizing that this is an industry-wide rather than a company-specific issue can lay the foundation for a recovery.
In fact, markets must have been aware of this going into Prime Day, as tariffs have been in place for a long time prior to the event, which is why the technical setup in Amazon today becomes much more critical.
Amazon Stock Just Shaped a Golden Cross
In the world of technical analysis, a golden cross event is one of the best indicators to look for in a stock in order to judge its future momentum. This event signifies that a short-term moving average, in this case the 20-day moving average, has crossed above a longer-term moving average, such as the 50-day moving average in this instance.
Whenever this happens, and at an accelerating rate as it is today, the regime overhauling the stock is likely to be bullish for the coming weeks and months. Fundamentally, this momentum indicator suggests whether the market is looking to take the stock higher or lower in the near term.
Considering this, investors can see that pricing in a potentially disappointing Prime Day did not slow down Amazon's stock. Now trading at 91% of its 52-week high, it’s likely that this golden cross will push prices back to previous highs and attempt to surpass them.
Knowing how important momentum is to a stock and that this short-term decline due to Prime Day doesn't indicate any future problems, some on Wall Street decided to take advantage of this gap to be filled higher. Youssef Squali, an analyst from Truist Financial, is one of these optimists as he reiterated a Buy rating on Amazon stock with a $250 per share valuation.
This view would not only mean that Amazon can make a new 52-week high before the year is over, but also that investors are staring down a potential upside run of up to 14% from where the stock trades today. Even the bears understand how significant momentum is and how unlikely it is for Amazon to stop anytime soon.
Over the past quarter, the short interest balance for Amazon stock declined from $18 billion in the first quarter of 2025 to only $13 billion in the current quarter. This is a sign of bearish capitulation even in a world of tariff and price uncertainty, giving bullish investors another pillar of strength to lean on in the coming weeks and months.
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