Amazon.com, Inc. (NASDAQ:AMZN) reports second quarter earnings after the closing bell
Amazon.com, Inc. (AMZN) reports second quarter earnings after the closing bell on Thursday, July 25, with the stock poised to break out above its all-time intraday high of $2,050.50 on a positive reaction to this report. The upside potential is to its semiannual and quarterly risky levels at $2,068.88 and $2,221.10, respectively.
Fundamentally, Amazon stock is overvalued with a P/E ratio of 83.28 and without offering a dividend, according to Macrotrends. I continue to view the stock as the “United States of Amazon,” as longer-term growth remains highly likely, with the weekly chart showing rising momentum, which is a positive characteristic for a FAANG stock.
The stock closed Wednesday, July 24, at $2,000.81, up 33.2% year to date and in bull market territory at 53.1% above its Dec. 24 low of $1,307.00. The stock set its all-time intraday high of $2,050.50 on Sept. 4 and its 2019 high of $2,035.80 on July 11.
Analysts expect Amazon to post earnings per share (EPS) of $5.29 to $5.70 when it reports results after the close on Thursday, July 25. Amazon Prime memberships are expected to continue to grow. The online retailer has a winning streak of seven consecutive quarters in terms of beating EPS estimates. Credit Suisse upped its price target from $2,000 to $2,500 on expectations that Amazon Prime will be expanded to additional products.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 1,904.53.
The projected upper bound is: 2,077.60.
The projected lower bound is: 1,931.15.
The projected closing price is: 2,004.37.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with AMAZON COM), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 68.2707. This is not an overbought or oversold reading. The last signal was a sell 8 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 62.32. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 6 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 7. This is not a topping or bottoming area. The last signal was a sell 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 3 period(s) ago.
Rex Takasugi – TD Profile
AMAZON COM closed up 6.320 at 2,000.810. Volume was 34% below average (neutral) and Bollinger Bands were 13% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,995.83 1,893.14 1,747.31
Volatility: 13 26 46
Volume: 2,991,817 3,590,875 5,391,217
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
AMAZON COM is currently 14.5% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into AMZN.O (mildly bullish). Our trend forecasting oscillators are currently bullish on AMZN.O and have had this outlook for the last 25 periods.
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