Amazon.com, Inc. AMZN opened slightly higher on Friday before slumping to trade near Thursday’s low-of-day, in tandem with the S&P 500which saw similar price action.
On Thursday, Amazon confirmed it planned to begin reducing its workforce, following in the footsteps of Meta Platforms, Inc METAthe latter which recently said it would cut its headcount by about 13%.
As the economy slows and the likelihood of a recession increases, more and more growth stocks will begin to look for ways to save money. Amazon plans to continue with layoffs into 2023, cutting its employee number by about 10,000.
Although Amazon negated a recent downtrend, the stock has shown comparative weakness to the general market recently. While the S&P 500 is trading in an uptrend on the weekly chart, Amazon is in a clear downtrend on that time frame.
Read more about layoffs at Amazon here.
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The Amazon Chart: Although Amazon is trading in a downtrend on the weekly chart, if the stock can hold above $93.50 on Friday, and bounce on Monday, an uptrend on the daily chart will be in play. If that happens, bullish traders will want to see Amazon climb up above the Nov. 15 high of $103.79, which would put the stock in reach of an upper gap.
- Amazon is also trading in an inside bar pattern on the daily chart, with all of Friday’s price action taking place within Thursday’s trading range. The pattern is neutral in this case but traders and investors can watch for Amazon to break up or down from Thursday’s mother bar on higher-than-average volume to gauge future direction.
- If Amazon breaks bearishly down from Thursday’s mother bar, a lower gap that exists between $89.47 and $91.65 could fill. Gaps on charts fill about 90% of the time, making it likely that Amazon will fill both the upper and lower gaps at some point in the future.
Amazon has resistance above at $95.49 and $99.88 and support below at $92.18 and $90.77.
See Also: Amazon Prepares For A Not-So-Happy New Year As CEO Tells Workers To Brace For More Layoffs