Shares of Amazon.com fell almost 2% on Tuesday, snapping through one of the stock’s most critical trendlines.
Shares of the online retailer and data center giant dropped following a flood of 13F filings that showed large reductions among institutional investors.
Companies like Dan Loeb’s Third Point and others showed declines in their holdings of Amazon while a smaller group of institutions did show an increase in the company’s stock.
For the most part, institutional investors in the large cap technology companies do not represent the sentiment of individual investors. That said, Amazon shares have seen a decline in retail investor activity lately.
Tuesday’s decline dropped Amazon.com shares below their 50-day moving average for the first time since July 2024.
A move below this bullish trendline puts the stock at risk for additional selling over the short-term outlook for the stock.
In July, shares of Amazon dipped below their 50-day moving average as shares recovered from selling pressure related to the company’s recent earnings report.
At the time, Amazon’s position with respect to its 50-day was in a bullish trend like today.
Shares were unable to find support over the short-term, resulting in additional selling pressure on the stock that would ultimately see Amazon.com stock drop further to test its 200-day moving average in August.
For now, investors need to focus on the $225 price as Amazon’s potential “trigger price” for bearish volatility.
A move below this price will break Amazon.com’s lower Bollinger Band, signaling an increase in selling pressure that will serve as a bearish technical event with $220 serving as the short-term price target.
Amazon’s 200-day moving average is currently prices just below the $200 price, meaning additional short-term selling will target the round-numbered $200 as the next “buy the dip” target price for investors.
Shares of Amazon.com maintain a long-term bullish trend with a price target of $275.
