How Amazon Stock Looks Heading Into Q1 Earnings Print

Amazon, Inc AMZN is set to print its first-quarter financial results after the market close. The heavily beaten-down stock was trading about 5% higher heading into the event but remains down over 20% from the Nov. 19, 2021 high of $3,762.15.

When the tech giant printed its fourth-quarter results on Feb. 3, the stock was trading near the current level but soared up over 16% the following day.

For the fourth quarter, Amazon reported blow earnings, with an adjusted EPS of $27.75 on net sales of $137.4 billion. Analysts estimated the EPS would come in at just $3.61 for that quarter. The e-commerce and streaming powerhouse slightly missed the sales estimate of $137.6 billion.

For the first quarter, analysts, on average, expect Amazon to report an EPS of $8.35.

From a technical analysis standpoint, Amazon’s stock has both bullish and bearish patterns and the reaction to the stock’s earnings print will determine which pattern is dominant. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

Options traders particularly, those who are holding close dated calls or puts, take on extra risk because the intuitions writing the options increase premiums to account for implied volatility. The implied move for options of Amazon expiring this week is 6.75%. 

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The Amazon Chart: Amazon has been trading in a fairly consistent downtrend since March 29 and on April 21, the stock broke down from a bear flag on the daily chart. The measured move of the bear flag was 12%, and Amazon fell 14% to the $2,722 level on Wednesday, which completed the break down.

• On Thursday, Amazon was running higher into its earnings events but it’s yet to be seen whether the stock will change trend to the upside or whether the bounce higher will end up marking the next lower high in the downtrend.
• If Amazon closes the trading session near its high-of-day price, the long lower wick could indicate higher prices will come on Friday. If higher prices come, it will allow Amazon to regain support at the eight-day exponential moving average, which would be bullish.
• If Amazon closes the trading day below the $2,880 level, the upper wick could indicate lower prices are on the horizon, which would confirm the downtrend is still intact.
• Amazon has resistance above at $3,000 and $3,131.06 and support below at $2,881 and $2,796.

See Also: Amazon's Refusal To Reveal Product Search Algo Could Fuel Its Showdown With Australia