Sellers are driving the Amazon price lower after the EU slammed Amazon with an antitrust lawsuit on Tuesday.
The lawsuit alleges that Amazon is damaging retail competition using its power and data capacity. The lawsuit says that Amazon is using its tools to gain an unfair advantage over smaller merchants that sell products on its platform.
The lawsuit was filed by the EU’s Commissioner for Competition, Margrethe Vestager on Tuesday. The news has caused a selloff in tech stocks in the US, most of whom have benefitted from a change in consumer shopping behaviour due to the coronavirus pandemic.
This is not the first time allegations of being a rival seller on its own platform has surfaced. A 2018 CNBC report alleged that the company was promoting its private-label brands before online shoppers placed competitors’ products in their shopping carts.
This suit also comes at a time when the US trade competition regulator is looking at Alphabet and Facebook, with the former already facing a similar lawsuit from the US Department of Justice.
Amazon share price is trading 3.27% lower on the day as at the time of writing.
Technical Outlook for Amazon Share Price
Amazon share price action on the daily chart seems to be forming a rounding top, with the highs of 13 July, 2 September, 13 October and 5 November providing the basis for the pattern. The neckline seems to be at the 2874.57 support. Today’s price action is challenging the 3084.19 support level (11 August and 16 September lows). A successful breakdown of this area opens the door towards the neckline.
The low of 13 May and 27 May comes in at 2342.55; this is the projected move that could follow a breakdown of the neckline support. However, downside targets at 2651.58 and 2499.21 must give way for the price projection to be achieved.
On the other hand, a run to the northern targets at 3253.66 and 3347.32 could follow a bounce on the present support. Only a break of the 2 September high at 3551.77 negates the pattern and allows Amazon share price a future run into record-breaking territory.