Amazon Enters Oversold RSI Zone After Earnings Miss, Signals 60% Rally Pattern
Amazon’s relative strength index has fallen below 30 for the first time since summer 2024, placing shares in extremely oversold territory after a post-earnings gap down. The last two RSI washouts preceded roughly 60% rallies from lows, highlighting a potential rebound opportunity.
1. Price Decline and Oversold Signal
After starting 2026 near $250, Amazon shares now trade around $210, roughly 20% below their November all-time high. Heavy selling pressure pushed the relative strength index below 30, marking an extremely oversold condition not seen since summer 2024.
2. Historical RSI Rebounds
The last two times Amazon’s RSI dipped below 30—in April 2025 and mid-2024—the stock proceeded to rally about 60% from its lows. This recurring technical setup suggests extreme oversold readings may precede significant upside in shares.
3. Earnings Miss and Capital Spending Outlook
Amazon reported a rare earnings miss last week, falling short by single-digit pennies, and issued a sharply higher capital expenditure forecast driven by AI initiatives. This guidance spooked investors, prompting the post-earnings gap down and undercutting near-term sentiment.
4. Analyst Support and Key Risks
Despite recent weakness, major brokerage firms maintain buy ratings with price targets above $300, implying over 40% upside. Key risks include prolonged tech sector weakness, unchecked spending without clear returns, and further capital expenditure surprises.