Amazon most oversold in 13 years

Amazon stock has fallen 26% from its mid November 2021 high.

For a little drama…..it has erased $463 billion of its market capitalisation within 2 months……

But the positive news is….

Simultaneously this week, #amazon shares registered two Weekly technical readings last seen 13 years ago (Oct 13, 2008).

The Relative Strength Indicator (RSI) touched 30, making it the most Oversold since then, while it also traded 3.5 standard deviations below its rolling Weekly Mean.

I normally look for moves of 2.5 or 3 standard deviations either side of the mean to signal an extreme.

Furthermore, Amazon should use this swoon in its price to announce the spin-off of its Amazon Web Services (AWS) business (at a probable market cap of a trillion dollars) so its done on their terms, rather than having government trust-busters telling them to do so.

January 26, 2022

by Rob Zdravevski

rob@karriasset.com.au