Amazon Stock at a Critical Price Level: Will It Rebound or Decline Further?

Amazon (NASDAQ: AMZN) is now trading at a key technical level, raising questions about its next move in the near term. The stock has slipped below the $200 per share mark and is approaching its 200-day moving average (200MA) at $198.64.

Key Support and Resistance Levels to Watch

• Current Stock Price: $200.37 per share
• 200-Day Moving Average (200MA): $198.64
• Key Trendline Support: $183, dating back to January 2023

A daily and weekly close below both the $200 psychological level and the 200MA could trigger increased selling pressure, particularly amid growing concerns over global trade tensions. If this scenario plays out, Amazon’s stock could decline by 8-9% from current levels, potentially testing the $183 long-term support trendline.

Technical Indicators Suggest Oversold Conditions

Despite the bearish price action, technical indicators now indicate oversold conditions, signaling a potential short-term rebound:

• MACD (Moving Average Convergence Divergence): Currently in oversold territory, similar to August 2023, when the stock previously rebounded.
• RSI (Relative Strength Index): Reading at 26, marking its most oversold condition since August 2023.

Will Buyers Step In?

Although these indicators suggest Amazon stock is oversold, this does not guarantee an immediate bounce. However, it increases the likelihood of buying interest, as some investors may see this as an opportunity to enter at lower prices. Additionally, short sellers may begin taking profits, which could lead to buybacks that temporarily support the stock price.

What’s Next for Amazon?

Traders and investors should keep a close eye on how Amazon stock reacts to the 200MA and key support levels. A sustained close below $198.64 could indicate further downside, while a bounce from oversold conditions might signal a reversal opportunity.