Amazon Just Did This—and It Didn't End Well Last Time

Core Viewpoint - Despite Amazon.com Inc's stock reaching an all-time high of nearly $260 in early November, it has recently experienced a sell-off, dropping over 10% to around $230, erasing almost all post-earnings gains [2][4]. Group 1: Stock Performance - Amazon's stock has seen a significant decline, with a drop of more than 10% from its recent high, indicating a bearish sentiment in the market [2]. - The Relative Strength Index (RSI) for Amazon has shifted dramatically from above 70 to below 50, suggesting a transition from overbought to oversold conditions [3][6]. Group 2: Market Sentiment - The rapid sell-off has led to a situation where bullish investors appear to have lost confidence, allowing bearish sentiment to dominate [4]. - This shift in market sentiment is particularly notable given the broader context of questioning tech valuations, especially those related to AI and cloud computing [5]. Group 3: Historical Context and Future Outlook - The last occurrence of a similar RSI swing for Amazon resulted in a 35% decline in stock price, raising concerns about potential future drops [5][6]. - Despite the current bearish trend, Amazon's fundamentals, analyst support, and diversified growth engines remain strong, suggesting that any significant drop could present a buying opportunity [5].