How Amazon Stock Looks Headed Into The Q3 Earnings Print

Amazon.com, Inc AMZN is set to print its third-quarter 2021 earnings after the closing bell Thursday. When the tech giant reported its second-quarter revenue miss on July 29, the stock gapped down 7% the following day, and the gap has yet to be filled.

In terms of guidance for the third-quarter, Amazon projected third quarter revenues to come in between $106 billion to $112 billion, which would represent a 10% to 16% year-over-year increase. Wall Street analysts predict revenues will come in at the top of the range with a $111-billion consensus estimate.

Unlike many of its FAANG counterparts, Amazon has lagged the markets this year — rising just 4.5% since the beginning of January compared to the SPDR S&P 500 SPY, which has soared about 21% higher.

That may be set to change, however, if Amazon is able to pull off a big surprise earnings beat or if, as many retail traders continue to speculate on social media, the company’s CEO Andrew Jassy were to announce a stock split.

A stock’s reaction to news is never predictable, and holding stock or options through earnings can be likened to gambling.

The Amazon Chart: Amazon has been trading in a strong uptrend since Oct. 4 when the stock bounced off a support level at $3,175.76.

Since the date, Amazon has made a series of consistent higher highs and higher lows, with the last higher low printing on Oct. 25 at $3,297.70 and the most previous higher high created on Oct. 20 at $3,462.86.

The stock’s reaction to Thursday’s earnings print will likely decide its future direction. If Amazon is unable to make a higher high, the stock will either reverse course into a downtrend by falling below the $3,297 area or tighten into a pennant formation by making lower highs and higher lows.

On Wednesday, Amazon looked as though it may begin an earnings pre-run when bullish volume began to increase at around 12:45 p.m. and the stock began to print a series of bullish Marubozu candlesticks on the 15-minute chart. Amazon then slammed into a resistance level at $3,435, rejected and wicked from the area.

Amazon has a gap above between about $3,549 and $3,580 left from the second-quarter earnings gap down reaction. Gaps on charts fill about 90% of the time, so it is likely Amazon will trade up into the range in the future.

Amazon is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading above the 50-day simple moving average, which indicates longer-term sentiment is bullish.

Bulls want to see big bullish volume come in and push Amazon up to make a higher high for confidence the uptrend will continue. Amazon has resistance above at $3,435 and $3,497.
Bears want to see big bearish volume come in and knock Amazon down below $3,297, which would negate the uptrend. Below the level, Amazon has support at $3,326 and $3,230.