Amazon.com, Inc. shares fell more than 9% on Tuesday and Wednesday, joining other FANG members in a volatile correction that could gather steam in the second quarter. Presidential tweets attacking the e-commerce giant’s favorable tax status were blamed for the decline, but market players have been selling the entire tech sector aggressively, taking windfall profits following outsized first quarter gains.
Amazon stock rose nearly 40% between 2018’s first trading day and mid-March’s all-time high at $1,617.54, adding to 2017’s impressive 56% gains. Taken together, the stock is now fully valued and in need of a long-term consolidation or decline to work off overbought technical readings and shake out complacent shareholders who believe that good investments never go down. Even so, major sell signals have been elusive in recent months and may require a shock event or adverse legislation to increase selling pressure. (See also: Trump Reportedly Wants to ‘Go After’ Amazon.)
Presidential tweets and overbought technical readings could drop Amazon shares into a major correction that tests the $1,000 level. …read more
Read more here: Amazon Stock Could Be Headed for Big Fall