Where to next for Amazon shares after their 20-for-1 stock split? – IG UK

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​Amazon stock split left market cold

Amazon, whose 20-for-1 stock split took effect on Monday, is struggling at technical resistance amid weaker retail sales and a gloomy economic outlook.

Shares of the e-commerce giant briefly rose in New York after the split, but have been coming off since, still down around 28% year-to-date and suffering alongside companies such as Target which yesterday announced that it will slash prices on unwanted items as it tries to get rid of around $15 billion worth of inventories, making its share price drop by 4%.

Stock splits were popular early this year as equity indices traded near record highs, with companies announcing them to make their share prices more alluring to retail investors, but now have less of an impact with especially technology stocks having shed a large percentage of their previous gains.

This year’s sell-off has made it easier for the behemoths such as Amazon to gain entry to the Dow Jones Industrial Average, whose weighting is based on the share price, but it could have the effect of making them look less enticing to investors than their massive market valuations and history of past tremendous gains would imply.

On another matter, Seattle-based e-commerce juggernaut Amazon has said it prevented four billion bad listings from making it onto its website and got rid of more than three million counterfeit products last year, the company’s second Brand Protection Report shows. This compares to 2020, when Amazon blocked 10 billion listings and removed two million fake products.

The online retail giant also saw a decrease in complaints of intellectual property infringement in 2021 while growing the number of active brands on its site.

What do the charts say?

The drop in the Amazon share price from its March high to its May low by close to 40% may have ended now that a double bottom has been formed on its daily share price chart. This chart formation looks like a slightly askew “W” with its mid-point coming in at $115.82.

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