On Friday, Amazon.com Inc. (NASDAQ:AMZN) shares edged slightly lower despite launching eight streaming services in India. The Asian country has become the 12th nation where Amazon channels are available.
The company is using Amazon Channels to drive prime subscriptions globally. Although customers signing up for streaming still pay individually for each service, Prime offers discounted pricing and a one-stop interface to manage multiple offerings.
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The company joins key rivals Walt Disney Co (NYSE:DIS) and Netflix Inc. (NASDAQ:NFLX) in the hotly contested high growth market.
From a valuation perspective, Amazon shares trade at a steep forward P/E ratio of 50.94, making the stock less attractive to value investors. However, according to analyst estimates, the company’s bottom line could grow by nearly 82% this year before rising by a further 26% next year.
Therefore, although the stock seems slightly overvalued based on its valuation multiples, growth investors could find it exciting for a long-term investment.
As a result, Amazon could still be an excellent stock to buy for investors willing to overlook its steep valuation.
Technically, Amazon shares seem to be facing resistance at the 100-day moving average. However, the stock is yet to reach the overbought conditions of the 14-day RSI, leaving more room for upward movement.
Therefore, investors could target extended rebound profits at approximately $3,340 or higher at $3,704. On the other hand, if the moving average indicator remains resilient, triggering a pullback, the stock could find support at $3,302 or lower at $3,174.
In summary, Amazon shares continue to trade in a choppy pattern formation, swinging to a net gain of about 6.87% this year.
The stock has recently bounced back after completing a downward swing. However, it still has room left to run before completing the recovery swing.
Therefore, with analysts expecting AMZN earnings to grow significantly this year and next year, it might not be too late to buy the rebound.
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