Amazon Pullback Ahead of Crucial Black FridayAmazon’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
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