Amazon.com, Inc. (NASDAQ:AMZN) to Defy a Patchy Track Record
Amazon.com, Inc. AMZN is set to report fourth-quarter earnings on Jan 31 after the closing bell. Analysts from SunTrust have warned that the e-commerce giant historically had limited success in the fourth quarter. According to SunTrust, the last time Amazon surpassed analysts’ expectations was in the fourth quarter of 2009.
However, this time around, things are looking up for Amazon. Not only is its ad business on the rise, strong holiday online sales will surely boost its earnings results. Based on proprietary data, Stifel analysts have noted that “the record holiday season for U.S. e-commerce, strong Prime membership growth, and investments in free shipping bode well for Amazon’s retail business in 4Q.” Amazon, thus, is widely expected to post $5.48 a share in earnings, up from $2.16 reported a year ago.
The Zacks Rank #2 (Buy) company also has an Earnings ESP of +11.36%. This is Zacks’ proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Upbeat earnings performance, no doubt, will lead to a rally in the share price. Thus, the company’s expected growth rate for the current year is a whopping 328.8%, in contrast to the Internet – Commerce industry’s expected decline of 5.4%. In fact, the company has outperformed the broader industry on a year-to-date basis (+11.2% vs +0.3%).
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1,736.05.
The projected lower bound is: 1,450.22.
The projected closing price is: 1,593.13.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
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 33.5319. This is not an overbought or oversold reading. The last signal was a sell 5 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 46.74. 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 buy 22 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 -150.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 11 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 1 period(s) ago.
Rex Takasugi – TD Profile
AMAZON COM closed down -44.010 at 1,593.880. Volume was 34% below average (neutral) and Bollinger Bands were 28% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,657.72 1,594.47 1,715.67
Volatility: 39 58 45
Volume: 5,275,688 7,061,639 5,578,137
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 7.1% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of AMZN.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AMZN.O and have had this outlook for the last 14 periods.
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