(Bloomberg) -- Analysts covering Amazon.com Inc. are still bullish on the stock, but technicals just sent a cautious signal.
The company is rated “buy” by 51 analysts tracked by Bloomberg, with just four “holds” and one “sell” rating. The stock's Monday closing price of $2,376 leaves 6% upside to the consensus target price, even with optimism recently growing.
That optimism cuts against the “outside down day” the online retail giant just had on Monday. As Miller Tabak + Co. Chief Market Strategist Matt Maley explained in a note, that's because it traded higher than Friday's highs and lower than Friday's lows, and ended up down. It's a sign of exhaustion, Maley said -- especially when a stock's had a significant recent rally.
“Amazon: ripe for a pull-back?” Maley put it in a research note. “Investors should be careful about chasing it up at these levels. If it sees any more downside follow-through, that would signal that a full-blown correction in the stock is highly likely.”
Amazon has risen 27% this year while the S&P 500 is down 10%, as investors have flocked to the e-commerce companies shipping goods to customers forced to stay at home during the coronavirus pandemic. Shares fell 0.9% on Tuesday, while the S&P 500 was up 1.2%.
Amazon is the third-biggest component of the broad market benchmark, and part of a shrinking group of winners -- which caused Goldman Sachs Group Inc. a few days ago to caution about future returns.
Read more: E-Commerce Stocks Soar With Pandemic Gains Seen as Long-Lasting
Maley said he doesn't want to “send up a big warning flag” about Amazon just yet, especially with earnings coming Thursday. But he recommended being cautious about adding to positions at these price levels “at the very least.”
Another trigger for caution would be a break below the stock's mid-April lows of $2,338, he said.
Amazon is scheduled to report first-quarter results after the market closes on April 30.
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