The world’s largest online retailer, Amazon.com, Inc. (AMZN) will hold a conference call to discuss its third quarter 2023 financial results on Thursday, October 26, after the close of trading. (1)
Wall Street believes AMZN will earn $0.58 per share (EPS) with sales of $141.41 billion. Both numbers are higher than last year’s EPS of $0.28 and $127.18 billion in revenue. (2)
Amazon’s stock price is in an interesting position heading into its third quarter report card. The stock broke an aggressive uptrend in the middle of September, tumbled through the end of the month, before breaking the short downtrend before pivoting higher in October.
The question is whether the recent rebound is the beginning of a new uptrend or a relief rally before the next leg lower? Earnings and guidance will most likely hold the answer.
If investors are pleased with Amazon’s results, then the 50-day moving average of $133.88 becomes the first point of technical contention. After that, shares could race to its 52-week high of $145.86 as there isn’t much resistance above the key 50-day mark.
If the street is unhappy with results, then the first level of support is $122.50 on the downside. A close below the September low and the 200-day average could be on Amazon’s itinerary.
Speculative investors might consider out of the money call and put options. As we type, the November 24th call options with a $134 strike price (right above the 50-day) last traded at $4.30. On the put side, the $122 put last traded at $3.93.
The stock would need to move a long way before November 24th, however, losses would be limited to the cost of the call and put options.
Trading earnings and options are only for the most aggressive speculators who can afford to lose money in a very short timeframe.
Rich Meyers
1 – https://ir.aboutamazon.com/news-release/news-release-details/2023/Amazon.com-to-Webcast-Third-Quarter-2023-Financial-Results-Conference-Call/default.aspx
2 – https://finance.yahoo.com/quote/AMZN/analysis?p=AMZN