If history is to repeat itself then Amazon.com, Inc. (NASDAQ:AMZN) is in for an impressive rally at the back of the usual holiday shopping frenzy according to CNBC’s Jim Cramer. In four of the last five years, Amazon stock has rallied from November to year end. This year is no exception as the stock continues to show solid signs of clocking highs heading into the New Year.
Founder and senior strategist at Explosives options.com Bob Lang believes that the stock is in for a solid run having set a new all-time high over a year ago. The giant retail store has been an underperformer for the better part of the year especially on the earnings front with the stock trading at lows of 20% on a year over year basis.
“This is a seasonally strong period for Amazon as we head into the holidays, but thanks to newly invigorated competitors like Wal-Mart Stores, Inc.(NYSE:WMT), Target Corporation (NYSE:TGT) Alibaba. Companies are under pressure from all sides. That said Amazon.com, Inc. (NASDAQ:AMZN) usually tends to deliver on the holidays with terrific sales numbers, “said Mr. Cramer
Lang believes that this time around Amazon’s run seems to have a stronger staying power unlike a resurgence that was experienced in August. One of the reason behind recent solid run according to Cramer has to do with the fact that there has been increased institutional buying on high volumes with more investors buying the company’s call options on huge volumes.
Back in July, the stock sunk from a high of $358 to a low of $324 but has continued to show signs that it could be ready to surge back to the highs of $358. Amazon.com, Inc. (NASDAQ:AMZN) weekly chart shows two double bottoms at the $300 mark which Cramer argues could act as a support to propel the stock higher in the coming months.
“Don’t bet against Amazon.com, Inc. (NASDAQ:AMZN) with Christmas right around the corner. Historically it has been a bad idea to sell the stock right now despite newfound competition from the websites of new retailers and even as I think Amazon stock is ridiculously expensive versus all other internet places especially Alibaba Group Holding Ltd (NYSE:BABA). I don’t think the holiday season will be any different this time around either, “said Mr. Cramer.
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