Short sellers in Aussie retail stocks took a look at the prices available on Amazon’s first day and worried
It’s early days but the first few hours since Amazon launched have seen a high momentum rally in retail stocks like Harvey Norman and JB Hi-Fi. This has no doubt been fuelled by short covering. Even Myer has had a positive day.
It’s hard to get analysis of comprehensive price comparisons at this early stage but markets appear to be forming the view that Amazon is not leading with the concerted 30% price discounts some anticipated
This may have something to do with the fact that initial offerings are weighted towards third party offerings via Amazon Marketplace rather than first party suppliers.
There is likely to be a long way to go in this retail warfare and it may be a couple of years before we get a reliable gauge on the kind of margin pressure and market share changes that Amazon produces. However, first impressions count and it appears that consumers and investors are a less impressed than they expected to be
In the case of Harvey Norman, a weaker open this morning followed by a major rally has left a large bullish engulfing pattern.
The next test will be whether a more comprehensive analysis of Amazon’s pricing sees the market push Harvey Norman into clear air past resistance and the 200 day moving average
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.