Amazon Pullback Ahead of Crucial Black Friday
Amazon’s share price has taken a breather in recent weeks, but the stakes are high with Black Friday right around the corner. As one of the company’s busiest and most profitable periods, this is a pivotal time for both Amazon’s business and its share price.
The Importance of Black Friday to Amazon's Business
Black Friday isn’t just a shopping extravaganza for consumers—it’s a profit engine for Amazon. Historically, Q4 accounts for roughly 35% of Amazon's annual net sales, and Black Friday is the centrepiece of that surge. In 2023, the company recorded over $149 billion in Q4 sales, and this year, guidance suggests even bigger numbers, with net sales expected to hit $181.5–$188.5 billion, reflecting growth of 7–11%. A significant portion of this increase can be attributed to the holiday shopping period, which also helps drive millions of new Prime subscriptions and locks in recurring revenue streams.
Prime Day-like events such as October’s Big Deal Days have added a layer of complexity this year, pulling some early spending forward. Even so, Black Friday and Cyber Monday remain critical, especially for high-margin categories like Amazon Devices, fashion, and third-party marketplace sales. For perspective, Amazon’s third-party sellers accounted for 60% of total units sold in Q3 2024, a trend expected to accelerate during Black Friday.
The stakes extend beyond sales figures—investor sentiment is tightly tied to Amazon’s ability to execute during Q4. With operating income guidance of $16–$20 billion, compared to $13.2 billion last year, Amazon is projecting significant profitability improvements. If the company can meet or beat these numbers, it could act as a catalyst for the stock heading into 2025.
Technical Analysis: Momentum Fading but Support Intact
Amazon's share price has enjoyed a solid uptrend this year, consistently printing higher swing lows and tracking above its upward-sloping 200-day moving average. The shares hit fresh trend highs earlier in November but experienced a sharp pullback beginning with a notable gap lower on Friday, the 15th. This move mirrored a broader selloff among the "Magnificent Seven" tech heavyweights, which faced headwinds from rising U.S. Treasury yields.
The pullback has brought Amazon's share price back to a key technical zone, where multiple levels of support converge. This area includes the 50-day moving average, a previously breached horizontal resistance level now acting as potential support, and an upward-sloping trendline linking the August and October lows. With the RSI at 49 and drifting lower, the technical picture suggests the market is at a crossroads. Upcoming factors, including Black Friday sales figures and further shifts in macroeconomic sentiment, will determine whether this level can act as a springboard or if the pullback gathers pace.
AMZN Daily Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.67% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
The Importance of Black Friday to Amazon's Business
Black Friday isn’t just a shopping extravaganza for consumers—it’s a profit engine for Amazon. Historically, Q4 accounts for roughly 35% of Amazon's annual net sales, and Black Friday is the centrepiece of that surge. In 2023, the company recorded over $149 billion in Q4 sales, and this year, guidance suggests even bigger numbers, with net sales expected to hit $181.5–$188.5 billion, reflecting growth of 7–11%. A significant portion of this increase can be attributed to the holiday shopping period, which also helps drive millions of new Prime subscriptions and locks in recurring revenue streams.
Prime Day-like events such as October’s Big Deal Days have added a layer of complexity this year, pulling some early spending forward. Even so, Black Friday and Cyber Monday remain critical, especially for high-margin categories like Amazon Devices, fashion, and third-party marketplace sales. For perspective, Amazon’s third-party sellers accounted for 60% of total units sold in Q3 2024, a trend expected to accelerate during Black Friday.
The stakes extend beyond sales figures—investor sentiment is tightly tied to Amazon’s ability to execute during Q4. With operating income guidance of $16–$20 billion, compared to $13.2 billion last year, Amazon is projecting significant profitability improvements. If the company can meet or beat these numbers, it could act as a catalyst for the stock heading into 2025.
Technical Analysis: Momentum Fading but Support Intact
Amazon's share price has enjoyed a solid uptrend this year, consistently printing higher swing lows and tracking above its upward-sloping 200-day moving average. The shares hit fresh trend highs earlier in November but experienced a sharp pullback beginning with a notable gap lower on Friday, the 15th. This move mirrored a broader selloff among the "Magnificent Seven" tech heavyweights, which faced headwinds from rising U.S. Treasury yields.
The pullback has brought Amazon's share price back to a key technical zone, where multiple levels of support converge. This area includes the 50-day moving average, a previously breached horizontal resistance level now acting as potential support, and an upward-sloping trendline linking the August and October lows. With the RSI at 49 and drifting lower, the technical picture suggests the market is at a crossroads. Upcoming factors, including Black Friday sales figures and further shifts in macroeconomic sentiment, will determine whether this level can act as a springboard or if the pullback gathers pace.
AMZN Daily Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.67% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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