(Photo : Photo by Christian Wiediger on Unsplash) Inc. shares skyrocketed enough on 02 February for it to cause a "breakout" technical rally even before the multinational e-commerce giant has reported earnings. A strategist from Janney technical named Dan Wantrobski via Marketwatch said the AMZN stock which is at +1.11% will potentially rise to $3,800 midway.

Amazon Stock Sets New Record as Charts Show 'Breakout' Rally Before Earnings are Reported
(Photo : Photo by Christian Wiediger on Unsplash)

Amazon Stock Forecast: A New Uptrend Begins 

For a few months now, Wall Street chart watchers and many investors have anticipated for Amazon to flow in its own trend which they call as a "pennant" pattern. Last March, Amazon saw its lowest of lows. However, as lockdowns started to be implemented all over the world, the company has benefited from this and has slowly risen up within a narrow range for the past few months. 

As The Street reports, this "pennant" pattern suggests that even when Amazon has been consolidating, it is still more likely to fall back like how it did last March. 

Last Tuesday, Amazon seemed to change the game for everyone. The AMZN stock rose above what the pennant trend suggests and opened at $3,380. It was way above the closing price which was $3,342.88. This likely suggests that the curse may have ended for the ecommerce giant, and that a new trend must have started

At midday, the stock surged at 1.8%. For the record, this has been Amazon's highest close since its performance in October. 

In line with this new uptrend, Wantrobski said "We believe this action bodes well for further gains ahead, and would recommend investors stay the course above $3,100-$3,200 support going forward."

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Amazon Stock Looking Bullish in the Market, May Begin to 'Outperform' other Markets

After this new closing, Amazon is expected to reveal a report of their fourth quarter results. FactSet, an analyst for possible company revenue expects that the average net income of Amazon will amount to about $6.3 billion, while its revenue will rise to about $120 billion. 

In reference to Amazon's weekly chart, Wantrobski also says that the Amazon stock is looking bullish in the market even for the long term. Again, he reiterated that the past pattern has been broken due to the new uptrend that has happened. 

Depending on the S&P 500 index, Amazon's stock is revealing a likely bullish reversal which should be of great interest to investors. "This implies the stock may start to outperform the broader markets on a relative basis once again," Wantrobski added.

For the past three months, Amazon's stock has improved to over 13.3%. However, it has still been underwhelming for the SPX, +1.39% of the S&P 500 gain at the same instance. In a bird's eye view over the last year, however, Amazon's shares are reported to have risen at 69.4%. This means that their yearly performance has beaten the S&P 500's 19.1% gain.

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Written by Nikki D

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