Wednesday, September 27, 2023
Hometalking numbersCan Amazon keep unions out?

Can Amazon keep unions out?

It may have been just a little more than two dozen workers but Amazon was able to keep them starting a trend the company wants to avoid: unionization. In a 21 to 6 vote, workers at an Amazon fulfillment center in Delaware rejected being unionized by the International Association of Machinists and Aerospace Workers.

Amazon already has unionized workers in Europe and they're not making life easy for the Seattle-based company with $70 billion in revenues and $132 million in net income over the last four quarters. Several hundred German workers went on strike during the peak of holiday orders last month.

(Read more: )

CNBC contributor Gina Sanchez, founder of Chantico Global, says Amazon won't avoid being targeted by unions despite this small victory in Delaware.

"The pressure from unions is going to continue, especially as wages continue to be low, and people feel like they don't have any money to spend," says Sanchez. "They (Amazon) don't have consistent wages at various levels."

Though the workers who voted not to unionize can't do so again for another year, that doesn't mean it goes away, believes Sanchez.

"It's probably going to come back," she says. "They have 1,500 people packing in their warehouses. That would be a bigger deal."

Nonetheless, Sanchez doesn't believe investors just yet about unionization eating into Amazon's already low margins. "I still think Amazon is a great buy," she says.

(Read: Here's what Amazon needs to do now)

Andrew Busch, editor and publisher of The Busch Update, is taking a wait-and-see approach to Amazon but not because of unionization. Rather, he says the technicals are showing the stock at a critical point.

Though the stock has hovered around its all-time highs since December, Busch is concerned that the stock's 10-day moving average is coming close to moving below its 30-day moving average.

"If that crosses to the downside, then that's a sell signal," says Busch. "That comes in at about $393."

Busch says to watch out for a range between $337 and $341 on the downside. That was where the stock once jumped, creating a price gap.

As discussed in a previous Talking Numbers segment, a familiar pattern in technical analysis is a "back and fill". After a stock jumps up in price, leaving a gap between one day's high and the next day's low (or vice versa), technicians say that eventually, share prices will go back to the price in between and "fill the gap".

"I think we need to go back and fill that," says Busch about the $337 – $341 range. "I'm looking to sell this if we get the 10-day moving average to drop below the 30-day around $393."

To see more of Sanchez and Busch on unionization and Amazon, watch the video above.

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