Amazon shares were trending on Stocktwits early Friday, with retail investors and analysts touting an imminent breakout following a sharp rally this week and a few other catalysts.

Investors were assessing their positions as Amazon wrapped up its two-day "October Prime Day" event - a prelude to the main holiday shopping sale - and with the third-quarter earnings kicking off. The company has yet to announce its results date.

"Perhaps Amazon's multiple has shrunk enough? It will never be 'cheap' but it sure is 'cheaper,'" noted CNBC commentator Jim Cramer said in an X post on Thursday. Amazon stock currently trades at 32.9 times the company's 12-month forward earnings, down from 41.2 times in February, the highest reading this year, according to Koyfin data.

Among the“Magnificent 7” stocks, Amazon's P/E ratio is the second lowest after Alphabet's and tied with Apple's. A low P/E ratio typically indicates that investors may be pricing in weaker earnings growth or viewing the stock as undervalued.

After rallying from mid-April through Aug. 1, when Amazon issued its quarterly results, the AMZN stock has traded within a range. Now, it is on a four-session winning streak.

Several Stocktwits users noted a bullish "breakout" pattern emerging, indicating that AMZN has breached or is approaching a resistance level, which could lead to a strong upward move.

"Stock breaking out of consolidation channel on the daily. seeing multiple call flow come in," said one user.

"If $AMZN continues the climb into Friday's session, it would be a disciplined move to pay yourself on those calls before the weekend +30%, then look to re-enter next week if the opportunity presents itself," another user said, outlining their strategy with respect to weekly options expiry on Friday.

On Stocktwits, the retail sentiment for AMZN was 'neutral,' with 'normal' message volume, as of early Friday. The stock has gained a mere 3.8% year-to-date, underperforming the benchmark S & P 500 and Nasdaq indices.

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