Amazon.com, Inc. (AMZN) is on next week’s earnings calendar. The monster online retailer is expected to earn a profit of 22 cents for the quarter with sales of $124.6 billion. The consensus earnings per share estimate held steady for the last two months at $0.22 per share (EPS). The retailer has struggled to live up to Wall Street’s hopes, missing the mark in three of the last four quarters. (1)
AMZN’s stock price has been in an uptrend since mid-March. Shares have been constrained by rising support and resistance connecting lows and highs during the current recovery. Based on AMZN’s chart, unless something amazing or terrible happens, Amazon shares are likely to have a muted response to earnings, in our opinion.
The 200-day moving average is ahead at $106.92 and the 50-day right underneath at $98.11. Longer-term, bypassing the 200-day mark would add octane to the bullish case and a close below the 50-day mark would be bad for shareholders. Upcoming earnings might not push the stock past either immediately but could be the butterfly flap that initiates the wind in the bullish/bearish case.
Trading earnings is only for the most aggressive investors who can afford to lose a lot of money in short order.