It’s a monster week for high-tech and related sectors of the us stock market as major companies such as Amazon.com ink. (Nasdaq:events of the week) will report their latest earnings. As usual, a lot of transactions will create on the basis of these earnings reports. Shares of amzn traded out in a specific well-defined trading range over the last couple of months, where traders may look to place trades. Let’s take a look at the charts.
As an important side note, this week the largest man-made earnings stocks in the eyes is not only the most important in this season earnings, but, perhaps, for the last four or five earnings seasons. Top and bottom-line comparisons are now becoming tougher on a year-over-year, and that puts many of the stocks on the risk of a further slowdown in their growth momentum and, perhaps, through the lens of technical analysis to develop lower highs on the charts.
Amazon.com in turn it is planned to provide the following set of earnings this Thursday after the close of trading on the day. This means that Friday morning will be the time that active investors and traders can look at the possibility of entering the market in one direction or another.
Amazon Stock Chart
Click to enlarge
MoviNG average legend: red – 200 a week, blue – 100 a week, yellow – 50 a week
On a multi-year weekly chart, we still see the reserve, which, as a function of greatest growth and growth prospects, the company continues steeper over the years. It also brought a lot of chart-chasing momentum traders who blindly buy all the others and was rewarded for it. However, the moment of truth will come after the growth Amazon.com begin to fall or at least to suspend, which in turn can make some major investors to take at least partial profits and thus leave customers dipping with some painful contractions.
To be clear, this does not mean, amzn stock may continue to grow in the long term. It’s all about timing.
The MACD oscillator at the bottom of the chart record remains in overbought territory and over time you’ll see that means the return down.
Click to enlarge
Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 days
On the daily chart and, as mentioned above, the shares of amzn over the last few months has developed a clear trading range, which should help active investors and traders the ability to trade setups the following report on Thursday.
March highs around the area of $ 1600 upper end of this range, while the $1,350 is the Lower end of the range and coincides with a horizontal support and 100-day simple moving average.
Stock traders can sell or even short of any significant post-earnings rally, especially if we see intraday fading/not the same initial reaction. Alternatively, a drop below $1,350 region may also offer the opportunity to play the stock amzn on the short side in the direction of the red 200-day simple moving average, currently around $ 1200.
Option traders want to earn income would probably be better to sell out of the money call spreads in any of the above two post-earnings scenarios.
If you want to learn more about the high probability of stock market income strategies, such as income from trading I will look at the amzn stock, please join me in a special webinar this Tuesday to InvestorPlace readers. Sign up here.
Check out Anthony Mirhaydari via the Daily market review for 24 April.
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