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Why Amazon Is Overvalued

The charts don' t think Amazon is overvalued. They show a possible run by Amazon to 100 plus in the near future. There is a lot of "blah blah" I can do taking both the bull and the bear side but at the end of the day the charts rule and they say Amazon is a buy and that it will run up higher to 100 plus.

Why I Wouldn't Buy Amazon

Amazon's charts look solid. Near term target $100.

Why Amazon Will Continue to Outperform in This Sluggish Market

I will say one more thing that is such a Wow factor with the charts. The NASDAQ is a strong buy on weekly charts while the Dow is not! Dow is yet to attain a weekly buy signal. But if NASDAQ is moving ahead sooner or later the parent Dow will have to follow. There is a struggle going on right now with gurus and pundits predicting a pullback but that would require both the Dow and NASDAQ to break down and I don't see how this is possible based on what we are seeing in terms of earnings and consequent price action of the NASDAQ stocks. MSFT came out and comforted investors that the sky is not falling and it is off to the races!. Very hard to imagine a mjarket pullback to March lows without the NASDAQ tanking along with the Dow.

Why Amazon Will Continue to Outperform in This Sluggish Market

Well, the charts rule! In messages above I said Amazon is on its way to 100. Look at the late trade action. The journey has begun.

And, Thomas, it is very difficult to value a hyper growth stock like Amazon on traditional metrics. The E part of P/E is rising so fast that the future stock value is a continuously upward moving target! Amazon may not have the pricing power but Amazon is on its way to getting a virtual monopoly on eCommerce on the Internet. They sell a ton, improve margin like crazy, and fuel the stock to new highs. Furthermore, the Kindle device is on its way to ubiquity much like IPod and their Kindle margins are outright generous. Like I said before "How do you value a future Walmart of the Internet?"

Why Amazon Will Continue to Outperform in This Sluggish Market

In case you have not noticed it -- growth stocks are back in fashion.

Look at what has happened to RIMM after earnings. A stock that had moved up significantly takes another leap up after earnings and does not show signs of fatigue. Look at the AH action on Apple. A stock that had registered substantial gains moves further up after earnings. The I-love-growth-stocks crowd is back which is a sure sign of investment money coming into the markets from the sidelines.

Now let's talk about phenomenon #2. Intel reports not-so-good outlook and stock goes down day of earnings. Now if we were in the middle of the recession this would have begun a long and steady erosion of Intel shares. Not so! Today the market is down but Intel is up! Look at IBM today -- same story. IBM up while market is down!

Guys, I suggest humbly to you that you are still living in the past. The market is looking forward. The QQQQ and leading tech stocks all have WEEKLY BUY SIGNALS, not just Daily chart buy signals, and I have not seen this since the whole crash began a year and half back. Such a groundswell movement is not possible unless the marklet thinks the economy has bottomed. You are doing what would have been right a few months back and now you will get burnt.

Why Amazon Will Continue to Outperform in This Sluggish Market

Never underestimate the intelligence of the market to see the truth from the lies. Look at how banks have got hammered in spite of producing seemingly great numbers.

If Amazon is going up it is not because people who invest millions are fooled by the Amazon management -- it is because they do their homework. Smart money knows what it is doing while you and I and what we think does not really matter. That is why it pays to follow the markets (via charts) rather than try and outsmart the maket.

Why Amazon Will Continue to Outperform in This Sluggish Market

LOL! What is funny about Amazon is that I check these comments everytime before earnings and they are always negative. Yet the stock continues to go up and up and up. Amazon's rise is identical to that of Google during the early growth years. Amazon is an unstoppable franchise. When all is said and done they will be the Walmart of the Internet. How do you value a Walmart equivalent on the Internet? Their Kindle will probably rival Ipod one day and be ubiquitous. How do you value the phenomenal new prospects that lie with the electronic reader?

NOW THE MOST IMPORTANT PART OF THIS POST. In terms of technicals there is no better chart than Amazon. Technicals at this point in time point to blue skies and a huge move upward in Amazon shares. Don't slay me for saying this -- slay the charts (!) -- the near term target for Amazon is one hundred dollars!

Can a Stock Market Meltdown Happen from Here?

So now we have to go find a fruitcake in Germany to tell us the the U.S. markets are going down? Seriously, this is outsourcing gone to the extreme! I did a little lookup on Google but unfortunately no stellar record of that sort turned up or maybe it is that I don't understand German and can't read a record right.

All I found was that this fruitcake has been a Goldbug for years -- you know the sort that thinks that civilized world is coming to an end and guns and ammunition and a cabin up in the woods with gold buried in the backyard is the safest course of action for all to follow. Or do I really have this down all wrong?

Dear author (or another worldly SeekingAlpha reader), could you please publish the Fruitcake's Munich fund's performance just for the record? If he truly called the financial meltdown AND THEN this recent rally almost precisely plus or minus a few points on the S&P and now an impending immense meltdown then this genius is probably on his way to loads of personal wealth and a fund track record that will put all money managers to shame.

Earnings Preview: Amazon.com

If Apple results are any indication then Amazon too will bring home the bacon. Expect a surprise to the upside with Kindle!