Thursday's Market Minute: Pre-Earnings Technical Analysis: AMZN & AAPL

Two giant stocks report earnings in today’s postmarket; Apple AAPL and Amazon AMZN. Both stocks are significantly up from their yearly lows, but neither fared particularly well yesterday, with Apple closing down -1.54% and Amazon falling -2.64%.

Of the two names, Apple’s recent history looks a bit better. Apple made new 52-week closing highs at 196.45 on Monday, yet was unable to take out the intraday highs just over 198. Shares briefly dipped below their 21-day Exponential Moving Average near 192 yesterday, but managed to recover to close just above it. The Relative Strength Index (RSI) also fell with price, but hung on above the 50 midline. Waning momentum is not necessarily uncommon heading into an event risk situation like earnings, but the move still is not what the bulls would have wanted to see. The intraday highs near 198 is the clear site to watch to the upside. To the downside, a few potential support points include the recent low close from July 11 near 188 and the 63-day EMA just below 184 based on yesterday’s close. 

In contrast, Amazon’s slip yesterday took shares below their 21-day EMA, which came in near 130 based on yesterday’s close, as well as below a volume node near the same area. Momentum also started to falter with the RSI falling below the 50 midline that separates bullish momentum from bearish. Earnings could certainly rewrite the script for momentum quickly, but once again, a shift toward bearish momentum is not ideal for bulls. The 21-day EMA now becomes a resistance point to watch, and beyond that the opening of a gap near 131.60. For support, the 63-EMA could provide a foothold near 123.60 as of yesterday’s close.

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