What To Watch For In Amazon Stock Before And After Q2 Earnings

Amazon.com, Inc AMZN is set to print its second-quarter financial results after the market close Thursday. The stock, which began trading on a 20-1 split adjusted basis on June 6, was trading flat near the $121 mark heading into the event.

When the e-commerce and streaming giant printed its first-quarter results on April 27, the stock gapped down the following day and closed the session down over 13%. The stock then continued in its steep downtrend, which brought Amazon to a May 24 52-week low of $101.26.

For the first quarter, Amazon reported a net loss of $7.56 per share on revenue of $116.4 billion. The company missed the consensus estimate of earnings of $8.35 per share but beat the revenue estimate of 116.3 billion.

For the second quarter, analysts expect Amazon to report EPS of 14 cents on revenues of $119.12 billion.

On Tuesday, Credit Suisse analyst Stephen Ju maintained an Outperform rating on Amazon and lowered the price target from $185 to $170.

From a technical analysis standpoint, Amazon’s stock looks headed higher following the earnings print. 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 institutions writing the options increase premiums to account for implied volatility.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Amazon Chart: On Thursday, Amazon was attempting to break up bullishly from a triangle pattern in which the stock has been trading in since July 13. If Amazon is able to break up from the upper descending trendline of the pattern, its uptrend will continue and the upper gap that exists between $130.76 and $135.78 may become filled.

• Amazon’s most recent higher low within its uptrend was formed on Tuesday at $114.53 and the most recent confirmed higher high was printed at the $125.50 mark on July 22. On Thursday, Amazon was printing an inside bar pattern and a hammer candlestick, which could indicate higher prices are in the cards for Friday.
• If Amazon suffers a bearish reaction to its earnings print and falls under the July 26 low-of-day, the uptrend will be negated and Amazon will lose support at the 50-day simple moving average, which could indicate a longer-term bear cycle is on the horizon.
• Amazon has resistance above at $122.24 and $125.93 and support below at $117.16 and $109.30.

See Also: Why Apple, Amazon Could See Big Upside After Earnings

Photo via Shutterstock.