Amazon Falls Back to a Key Support Line: Here's How to Play It

Key Points

• Amazon is down over 20% from February's record high and near multi-year support.
• Jefferies sees a 30% upside, reiterating its Buy rating with a fresh $250 target.
• Their next earnings report is expected to beat again, adding to the long-term bullish case.

Amazon.com Inc. NASDAQ: AMZN is back in the spotlight after falling to fresh 2025 lows during Monday's session. The stock, now down more than 20% from its all-time high in February, is officially in a technical bear market. This latest drop is particularly notable because it has brought shares right back to a key multi-year support line around the $190 level, a level that's been a ceiling and a floor for Amazon over multiple years.

In the short term, this move reflects a broader cooling of market sentiment. Uncertainty around Donald Trump's proposed tariff plans has weighed heavily on investor confidence, triggering a shift away from equities and high-growth names in particular. Even last week's rally, which briefly suggested that the low might be in, has begun unwinding. However, as the dust settles, technical traders and long-term investors are watching closely to see if $190 holds firm for Amazon.

A Multi-Year Support Level Comes Into Focus

Support lines like this don't come along often, and those with a multi-year history tend to be better regarded than most. This $190 level was a significant resistance point in 2021, capping two failed breakout attempts, before it re-emerged as a challenge in early 2024. It's now a battleground again in 2025, with the bears unable to take the stock decisively below it. 

When a stock repeatedly fails to break below a specific level, it's often a sign that the bears are running out of steam. That pattern may now be playing out again with Amazon. If this level continues to hold in the sessions ahead, it could represent a strong foundation for a rebound, particularly with earnings season around the corner.

Consistent Outperformance on Earnings

Amazon's fundamental performance continues to paint a bullish picture. Throughout 2023 and into early 2024, the company repeatedly exceeded analyst expectations across both revenue and earnings metrics. Its most recent quarterly report in February was no exception, setting a new record and marking Amazon's most profitable quarter to date.

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Those results are part of a broader trend of operational strength. Cloud growth is stabilizing, advertising revenue continues to expand, and cost-efficiency measures have helped boost margins across key divisions. With the next earnings report due at the end of the month, expectations are high that Amazon will once again post solid top and bottom-line beats. If that materializes, it could act as a powerful catalyst for the stock to retest its prior highs, primarily if the $190 support line has been held in the meantime. 

Analysts Remain Bullish Despite the Pullback

Adding to the potential upside here is the fact that, even with the recent volatility, Wall Street remains firmly in Amazon's corner. This week, Jefferies reiterated its Buy rating on the stock and assigned a fresh price target of $250. From Monday's closing price of $190, that implies more than 30% upside - an attractive setup by any measure, especially for a $2 trillion company.

Technical Picture Signals a Turning Point

In addition to sitting on a key support line, Amazon's technical indicators are beginning to shift. The stock's relative strength index (RSI) remains above the sub-30 range, indicating deeply oversold conditions. That reading has since climbed to 36, suggesting some early signs of recovery, while the moving average convergence divergence (MACD) line just confirmed a bullish crossover. 

While not guaranteed, these signals add weight to the argument that $190 could mark a turning point. If the stock can hold above this level for a few more sessions, it could well invite a fresh wave of buying, particularly from traders who view this as a textbook support play.

Final Thoughts

Amazon's recent 20% drop has been tough to watch, but it may also be presenting one of the best risk-reward setups in months. With a strong fundamental track record, bullish analyst support, and the stock now sitting just above a multi-year support line, the pieces are in place for a rebound.