A Closer Look at Amazon’s Relative Strength and Volatility

Amazon’s relative strength

In the previous article, we discussed select technical indicators for Amazon (AMZN) stock. Now let’s take a look at Amazon’s RSI (relative strength index), one of the most widely used technical indicators. Amazon’s 14-day RSI is 53, indicating that the company’s stock is neither overbought nor oversold.

An RSI figure of below 30 suggests that a stock has been oversold, indicating that negative momentum in the stock is high, which may lead to a rise in the near future. An RSI figure of higher than 70 suggests that a company’s stock has been overbought, indicating that positive momentum in the stock is so high that it’s likely to fall soon.

A Closer Look at Amazon’s Relative Strength and Volatility

Amazon’s ATR and volatility

Amazon’s ATR (average true range) value is 30.4. Investors and traders use ATR in technical analysis to determine the volatility of a stock. The metric is helpful in aligning investment choices with risk profiles. High volatility or high ATR readings are likely to be seen during downtrends and are thus indicators of a possible trend change. Low volatility or low ATR readings are usually witnessed during uptrends and correspond to weaker movement trends.

Amazon stock has a beta of ~1.70, which indicates that it’s ~70% more volatile than the overall market. When a stock’s beta is higher than 1.0, it’s usually viewed as more volatile than the market.