Expansion on The Cards For Amazon?

Citing Wall Street Journal, Business Insider reports that Amazon is seeking to raise $3 billion in debt. This is the good side of low interest rates. Perhaps, Amazon has big expansion plans.

And why not? It’s paying 0.38 to 0.93 percentage points more than comparable Treasury rates in interest for the bonds, which mature in 3, 5, or 10 years.

As of the last quarter, Amazon had $5.25 billion in cash and short-term securities, and no long-term debt. But it has plenty of uses for that cash: First, its headquarters, which it just agreed to buy for $1.16 billion. Second, its gigantic fulfillment centers, which it is planting across the United States as the old sales-tax regime (where online retailers where exempt from collecting tax) falls apart.

Chart pattern for Amazon is also indicating that something is in the stores for AMZN. It is in the process of making a cup-&-handle pattern on the weekly chart. The cup started its formation in October 2011 and completed the shape in September 2012, with right rim slightly higher than the left rim. The subsequent retracement reached to about 38.2% Fibonacci ratio of the rise from the bottom of the cup to the right rim.

Currently, the handle is not complete though it has taken about 11 weeks to form. The cup took 48 weeks to form. If the C-&-H breakout completes in another 3-5 weeks than the pattern will have significance.

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