Merchant Innovation

Amazon May Be Heading For A Big Stock Selloff

Making guarantees on the stock market is a risky business, but many commercial and private entities rely on professional insights to keep their portfolios insulated from sudden losses. However, are those insights enough to go on when it comes to getting rid of Amazon stock?

TheStreet certainly thinks so, as a recent report suggests that Amazon might be right around the corner from a massive share selloff. Using what it called “the objective decision support engine,” TheStreet analyzed months of data to predict that the upward trend in Amazon shares since August was indeed slowing to a dramatic reversal. Though shares had risen from $450 in August to a December high of $692, followed by a dip to $675 as of New Year’s Eve, prices dropped to $636 when markets opened Monday (Jan. 4).

Why is that number significant? It’s only $16 above $620 — the “line in the sand” that, should Amazon’s share prices fall below, TheStreet claimed would serve as a harbinger of an historic decline in the company’s stock. The decline could end up being so precipitous that the source noted it could present an opportunity for short sales not seen since the dotcom bubble burst in the early 2000s.

While only insiders know for sure whether Amazon is fated to rise or fall on Wall Street, DC Inno explained that the retailer is finding itself somewhat at the mercy of larger market forces. First, Amazon’s shares were downgraded by Monness Crespi Hardt on Monday from buy to neutral, which could not have helped investor confidence. Speaking of confidence, the market became bereft of that following China’s difficult start to the 2016 investing year, and the shockwaves of that turmoil have found their way to American shores to drag Amazon’s shares down even further.

Does this confirm predictions that Amazon is approaching a financial cliff with its shares? Hardly, but it’s not as if the news is exactly encouraging, either.

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