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Just For You The Last 2 Times Amazon's RSI Did This, the Stock Rallied 60%Authored by Sam Quirke. Article Published: 2/13/2026. 
Key Points - Amazon has slid roughly 20% from last year’s all-time high, with the selloff accelerating after last week’s earnings report.
- The stock’s RSI has now dipped below 30, a rare occurrence that previously preceded big recovery rallies.
- With analysts still overwhelmingly bullish and price targets ranging north of $300, the risk/reward profile is looking quite attractive.
- Special Report: [Sponsorship-Ad-6-Format3]
Having started the year near $250, tech titan Amazon.com Inc (NASDAQ: AMZN) is now trading around $210. A choppy January turned into a bruising start to February after the company reported a rare earnings miss last week and unveiled a sharply higher capital expenditure forecast that rattled investors. The stock gapped down following the report and has shown few signs of reclaiming lost ground. What was meant to be a strong start to the year has instead become investors' first confidence test of 2026. The stock is now roughly 20% below its November all-time high, with momentum clearly swinging to the bears. Yet beneath the surface, something interesting is happening. Because selling has dominated buying, Amazon's relative strength index (RSI) has sunk below 30, pushing the stock into extremely oversold territory. That doesn't happen often, but history suggests it's worth paying attention when it does. An Interesting Pattern The last time Amazon's RSI dipped below 30 and entered extremely oversold territory was in April 2025. The stock went on to rally roughly 60% from that low. Before that, the previous sub-30 reading occurred in the summer of 2024 and was also followed by a powerful rebound of around 60%. That doesn't guarantee a repeat this time, but it does suggest a pattern worth watching closely. When sentiment around Amazon becomes this washed out, it has tended to precede significant upside rather than further downside. Why This Setup Could Rhyme With the Past As regular readers know, there are multiple reasons to be bullish on Amazon's prospects beyond this technical setup. For one, the current weakness is not driven by a broken business model so much as by investor anxiety about higher spending. Investors were spooked not just by the modest earnings miss, but also by the scale of capital expenditure tied to Amazon's AI ambitions. In a market increasingly sensitive to spending discipline, that headline carried extra weight. However, the company's fundamentals remain largely intact. AWS growth, for example, remains solid, and Amazon's retail business continues to perform. A single earnings miss, especially one measured in single-digit pennies, does not erase that progress. Analysts Remain Bullish Just as importantly, analyst support has barely wavered. Since the report, there has been near-unanimous backing of the stock as a Buy, with firms such as Morgan Stanley, Wells Fargo, and Argus setting new price targets of $300 or higher. From current levels, that implies more than 40% upside. That may not quite match the roughly 60% surges seen after prior RSI washouts, but it highlights the opportunity taking shape right now. What Could Derail the Bounce Thesis The obvious risk is that this time is different. If capital spending continues to balloon without visible returns, or if broader tech sentiment deteriorates further, oversold conditions alone will not be enough to drive a recovery. A stock can remain oversold longer than investors expect, regardless of solid fundamentals or analyst support. There is also the technical reality that Amazon's recent attempts to rally have been underwhelming. While the stock showed signs of being bought off its post-earnings lows on Feb. 6, the following trading days saw little follow-through. Watching the Ticker For now, it's all about how the stock behaves in the short term. With tech stocks in general under pressure, an immediate snapback in Amazon shares may be optimistic. However, if selling pressure eases and buyers step back in, the setup could quickly become interesting for investors.
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