Amazon Rally Continues
Shares in US tech giant Amazon are trading around 1.5% higher pre-market on the final trading day of the week.
The rally comes in response to news that Amazon Prime has begun its joint service offering with UK supermarket Morrisons.
The move means that Amazon Prime customers will be able to access “Morrisons on Amazon” and have groceries delivered to their homes. The operation began yesterday in Leeds and will be rolled out across the rest of the UK over the remainder of the year.
Amazon customers have been able to purchase select Morrisons goods on Amazon for some-time. However, the new service will entail a full product offering.
Morrisons even has its own storefront on the Amazon Prime website where users can qualify for free same-day delivery on orders over £40.
Greater Choice for Customers
Commenting on the news, Amazon’s UK Country Manager said:
“The launch of Morrisons on Amazon means increased visibility for Morrisons’ incredible service and selection, as well as an even greater choice for our customers. We’re always looking at ways to make Prime even better and this expansion of our relationship with Morrisons means that millions of Prime members can soon order their weekly groceries from their local Morrisons shop, with same-day delivery, at no extra cost.”
Strong Q2 Earnings Beat
Shares in Amazon have been well supported over recent weeks following a strong Q2 earnings beat.
Amazon reported earnings per share of $10.30 in the June quarter. This marks a solid beat of the $1.48 Wall Street estimate. The company attributed the firm rise in sales to the massive increase in online shopping due to the pandemic.
Amazon reported an increase in revenues to $88.9 billion over the quarter. This marked a 40% rise on the same quarter last year, with a net income of $5.2 billion.
As part of the expenditure over the quarter, Amazon noted $4 billion in costs related to increasing employee and consumer safety during the COVID-19 pandemic and forecasts a further $2 billion in similar costs over Q3.
Amazon Shares Testing Resistance Once Again
Amazon shares continue to put pressure on the 3332.07 level. Supported by the rising trend line, price is now moving in an ascending triangle against the level. This is keeping the focus on an eventual upside break.
However, with the RSI indicator showing strong bearish divergence, there are risks of a reversal lower. The next key support to watch is the 2883.33 – 2793.58 region, with the rising trend line coming in just ahead of that.
