Amazon Shares Rallying

Shares in Amazon are trading higher ahead of the open on Monday amidst a general improvement in risk sentiment. Following a decent rally across Thursday and Friday last week, the US Dollar has started the new week with a weaker tone, allowing for a pickup in risk appetite. This improved appetite is also linked to the ongoing US debt ceiling negotiations which will continue tomorrow. Traders are hopeful that a resolution can be agreed, avoiding a US government debt default which, if confirmed, should help drive stocks higher near-term alongside a drop in USD linked to reduced safe haven demand.

Delivery Network Optimisation

Amazon shares are also deriving support from news over the weekend that the company has improved its delivery network on the back of the pandemic to help increase speed and reduce delivery costs. As part of its drive to improve its delivery network, Amazon recently began offering cash incentives for customers to collect items instead of await delivery. On the back of a solid set of Q1 results, shares have been firmly higher and look poised for further upside near-term.

Technical Views

Amazon

The rally in Amazon shares this year has been framed by a narrow bull channel off the lows. Price is now testing the long-term bear trend line as well as the 110.66 structural resistance level. With momentum studies bullish, the focus is on a breakout higher here and a run up to the 123.79 level next. To the downside, 103.36 is the next support to note.