Talking Numbers

This could worry Amazon shareholders

This could worry Amazon shareholders

Amazon isn't ready to show you its dongle just yet but, when it does, it wants you to buy it.

The online retailer is reportedly set to start selling a dongle device in April that will allow streaming video and games on to users' TVs and computers. This allows the company to compete with Google Chromecast, Apple TV, and Roku when it comes to TV and, of course, Microsoft's Xbox and Sony's PlayStation on the game side.

And, just last week, the company raised its Amazon Prime subscription costs from $79 per year to $99 per year.

(Watch: Amazon's set top box will be a dongle like chromecast, could feature OnLive-style streaming)

So, with new products and higher revenues, as well as a share price that's up 436% in the last five years, is Amazon's stock a buy?

Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, says the technicals say otherwise.

"I would not be committing new capital to Amazon," says Ross. "And, if I were fortunate enough to have enjoyed that ride higher, I would probably be trimming that long position."

While the stock has stayed above its 150-day moving average since May 2013, it stayed in a tight trading range above $380 per share from November until a steep drop at the end of January. Though it still remains above the 150-day moving average and is $1 shy of breaking above $380 once more, Ross doesn't see the stock moving much higher.

"I would take advantage of this recent rally to trim that long position into that resistance," says Ross. "I see a retest of the 150-day moving average [currently at $350] and, clearly, a break below that key, longer-term moving average would suggest that that longer-term uptrend could be reversing to the downside."

CNBC contributor Gina Sanchez, founder of Chantico Global, says that while Amazon may be doing more to monetize its products like Amazon Prime, the stock itself may be overpriced.

(Read: Amazon sees backlash among Prime members)

"I've been fairly positive on Amazon along with the rest of the world, it would seem," says Sanchez. However, we're seeing a number of analysts that are… drastically reducing their forward estimates for Amazon. And, if you look at the valuation, it is insane."

Sanchez thinks investors should wait before buying the stock.

"We really need to let this stock catch up to its own valuation," says Sanchez. If you own Amazon, you might just want to hold it or even potentially trim it."

To see the full discussion on Amazon with Ross on the technicals and Sanchez on the fundamentals, watch the video above.

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