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Category Archives: AMZN
Amazon.com Price Momentum
Below is the Amazon.com (AMZN) from 2001 to 2023 applying the Price Momentum Indicator.
Amazon Price Momentum $AMZN
A recent article on Yahoo! Finance suggested that Amazon is ‘attractive’ at this level and is being priced at ‘virtually zero value’. Naturally we are curious and wanted to run it against our Price Momentum model and hope that we can get some meaningful insights on when to optimally purchase Amazon.
Below is a chart of Amazon (AMZN) from 2000 to 2022, reflecting Price Momentum data. Continue reading
Amazon.com: Cyclical Trends
Below is a chart of Amazon.com (AMZN) from 1997 to 2019.
In the charts that follow, we break down the percentage change in each cyclical rise and decline of Amazon.com. These cyclical changes put into perspective the current rise and help to gauge what to expect when the next cyclical decline arrives. Continue reading
UPS should Buy FedEx
Regulators might not approve the deal, but the reality is that UPS, FedEx, and Amazon are in the same business. Inevitably, UPS and FedEx are going to want or need to merge in order to thrive. When and if that occurs, as tired industry behemoths get, they will do it exactly the wrong time.
The chart below highlights the relative price of FedEx and UPS since the IPO of UPS.
Since 1999, FedEx has made significant gains on UPS. However, the recent decline of FedEx since February 2018 and the recent reversal in September 2019 suggests that FedEx may have bottomed OR that UPS made be headed lower while FedEx treads water or rises.
For UPS, this is the ideal time to make an offer for FedEx as FDX lingers at 2005 levels. UPS being unwilling or unable to seize on FedEx at this time (too steep a price at any level) may be the opening for Amazon. Looking at the relative price of FDX/AMZN since UPS went public has the following skewed scenario.
Clearly, AMZN holds all the cards. If FDX and UPS can’t see this reality, they may be forced to merge under less ideal conditions. Regulators would be far more favorable to an acquisition of a “retailer” of a shipping company versus two shippers that are almost equals with significant market share.
Check the top ten air and ground shippers outside of these companies, there is going to be action in this group before long.
Amazon.com Downside Targets
On October 25, 2018, in after-hours trading, Amazon.com (AMZN) was trading down to the level of $1,664.00.
We’ve tried the Speed Resistance Lines on this stock in the past and it is one of the few that has not achieved the conservative downside target. In spite of previous failures, here we go with the minimum downside target for AMZN, let’s watch as it defies (again), our minimum target of $969.28.
Posted in AMZN, Edson Gould, Speed Resistance Lines, SRL, The Study of Failure
Amazon Effect Wearing Thin
On April 18, 2017, W.W. Grainger (GWW) declined –11% when the company announced earnings that seemed to disappoint analysts.
In addition, many analysts were confident that the effect of Amazon would torpedo GWW even more than what had already been done up until April 2017.
Our take on W.W. Grainger was materially different than some of the big name analysts. However, we weren’t alone in saying the GWW was worth buying.
Posted in Amazon.com, AMZN, GWW
Yearning for the Richard Russell of Yore
As Dow Theorists, it is required that we read the information that is put out by Richard Russell. So it perturbed us to find that there has been nary a peep on Russell’s site about Dow Theory based on the recent movement of the Dow Jones Industrial Average and the Dow Jones Transportation Average. As noted on our site today, Dow Theory has given a reiteration of the bullish trend that has been in place since the July 2009 bull market confirmation.
In the last two days we have feverently scoured Russell’s website for any confirmation of our perspective on Dow Theory. We’ve found nothing. Even more alarming is the vague reference to Dow Theory as it pertains to value. This reference in passing was circumspect at best and puts into question any attempt to demonstrate any understanding of the topic. On November 3, 2010, Richard Russell said:
“My own opinion regarding the markets is that the test of values trumps all other considerations.”
Russell goes on to conclude that based on historical values of the market, stocks and bonds are in a bubble. After concluding that stocks and bonds are in a bubble, Russell says that he doesn’t want his subscribers to buy stocks or bonds. Finally, in his November 3, 2010 posting, Russell laments the period of 1997 to 1999 and states, to our disbelief:
“Who were those geniuses who piled into AMZN [Amazon.com] when it was selling for under five clams?”
Along with the preceding quote, Russell included only a chart of AMZN and a description on how much he buys almost everything from the Amazon.com.
We’re not so sure that Russell was pining for AMZN back in July 1, 1998 when Amazon.com was selling for $19.02 [adjusted for splits]. At that time, in his letter published on the same date, Russell said:
“Bookseller Amazon.com is priced at over 81 [ $81 unadjusted/$19.02 adjusted] now, but it won’t be making a nickel of profit for at least two years.”
There was no indication that Amazon.com was at a value at the time.
On November 4, 2010, Russell ties the concept of Dow Theory to values. This was the first reference to Dow Theory after the bull market confirmation on November 3rd. In this excerpt, Russell gives an idea as to what exactly he looks for to determine values, namely dividend yield and P/E ratios. Then Russell goes on to say:
“In the business of investing, money is made in the buying (see Amazon study on yesterday’s site). Buy right and you’ll end up with profits. Buy wrong, and you’ll end up with tears.”
We were perplexed that Russell would connect Amazon.com with buying values at a time when, back in 1998, there were no dividends to generate a dividend yield and no earnings to generate a P/E ratio. This attempt to demonstrate the importance of values was further distorted when Russell starts discussing buying gold in the November 4th article. Russell said:
“Buy gold at the highs, buy gold on a correction, buy gold when its in a confusing consolidation, and within five years you’ll thank the day when you bought it.”
To say “Buy gold at the highs…” counters all the efforts to educate investors on the importance of values. In addition, there was no reference to the fact that Dow Theory had giving a bull market confirmation. It is troubling that Russell further tarnishes his reputation as a keen observer of markets [regardless of being right or wrong] by not addressing the validity of the signal on a theory that is the title of the newsletter.
Although we generally agree with Russell’s perspective on gold, for different reasons, we hope his subscribers aren’t being led astray by his blatant contradictions simply because he is bullish on gold at a time that the gold market happens to be moving higher.
Sources:
- Russell, Richard, Dow Theory Letters, (San Diego, California), July 1, 1998, page 6. Letter 1255. http://www.dowtheoryletters.com/
- Russell, Richard, Dow Theory Letters, (San Diego, California), March 2, 2005, page 6. Letter 1384. http://www.dowtheoryletters.com/
- Russell, Richard, Dow Theory Letters, (San Diego, California), November 4, 2010, Daily Commentary. http://www.dowtheoryletters.com/
- Russell, Richard, Dow Theory Letters, (San Diego, California), November 3, 2010, Daily Commentary. http://www.dowtheoryletters.com/
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