Why Amazon shares could rise another 20%

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Amazon shares surged 14 percent a day after the company reported impressive earnings numbers, which means that the stock is now up 43 percent in 2015. But one technical analyst says the best is yet to come.

"I do see more upside for one major technical reason," Jason Rotman of Lido Isle Advisors said Friday in an interview on CNBC's "Power Lunch."

"I connected the highs of 2011 and 2014, and that's basically the 'supply line.' So I think there's going to be major demand until Amazon reaches that supply line, which is still 20 percent away, if you're talking about an end-of-year target," he said.

In other words, Rotman is attempting to find the level at which supply of the stock will come into the market from willing sellers. For some stocks, that's a specific price, but when it comes to Amazon, Rotman believes the supply comes in when the stock reaches a certain moving target.

That is, because Amazon has risen so rapidly in years past, shareholders aren't likely to bail unless prices reach $550 by the end of the year, Rotman said. After Friday's 14 percent runup, the stock closed at $445.10.

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Also Friday, Janney Capital Markets upgraded its rating on Amazon shares to "buy" from "neutral," and raised its price target to $488, citing an "improved growth/profit outlook."

Needless to say, not everyone is bullish. BGC analyst Colin Gillis, who maintains a "hold" rating on the stock, wrote that while investors are getting enthusiastic about Amazon's cloud business, "the core business is unprofitable," and far too much hope is currently priced into the name

Gillis even saw fit to commemorate the speculative nature of the name with a haiku atop his research note: "It may prove fitting, with Nasdaq at 5000, Amazon shares soar."

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