As analysts scrambled to comprehend Amazon’s new smartphone on Wednesday no one stopped ask: why is Jeff Bezos even bothering? Here is a company that has grown gross profits by more than 30 per cent annually for 18 straight quarters. Sales that were a whopping $48bn at the start of 2012 may have doubled again by the end of this year. Sure returns are depressed – hence Amazon’s hilarious 300 times forward p/e ratio. But investors understand that when capex finally moderates cash flows will leap. Also why chase the 150m smartphone users in the US when more Americans visit your website every month? Amazon already has 250m active customers around the world spending on average $1,000 a year each. And everyone knows making money from music streaming is almost impossible - like persuading people to ditch their Samsungs and iPhones. 

Eoin Treacy's view

Here is a link to the full note. 

Amazon is in danger of overreaching as it attempts to make inroads into progressively more sectors.

The share has experienced its largest pullback since at least 2011 and this week encountered resistance in the region of the 200-day MA. It will need to find support above $280 on the current pullback if this year’s downward bias is to be countermanded. Meanwhile the most likely scenario is for prolonged ranging as confidence is rebuilt.