PreMarket Prep Stock Of The Day: Amazon

Every earnings season takes on a character of its own. For example, in the second quarter of 2020, many of the companies that posted staggering losses as a result of the pandemic were given a pass, with investors buying the dip. 

Starting with JPMorgan Chase JPM, the first major S&P 500 component, the call to action was “sell the rip.”

That has continued in Wednesday’s session as Amazon.com, Inc. AMZN has gone from green to red after a monster earnings beat. It's the PreMarket Prep Stock of the Day.

Amazon's Pre-Earnings Rally: After four months of consolidation and a trading range from $3,000-$3,500, with a majority of the price action between $3,050-$3,350, Amazon caught a nice bid ahead of Tuesday’s report.

From Friday’s close ($3,206.20), the issue sprinted to $3,427.74 on Tuesday and backed off to end the session at $3,206.20.

Amazon's Beat And Then Some: The company announced fourth-quarter EPS of $14.09 versus the $7.23 estimate, along with healthy sales of $125.6 billion versus the $119.70-billion estimate.

A few investors were rattled that Jeff Bezo was stepping down as CEO, but the retreat in after-hours found plenty of willing buyers.

PreMarket Prep's Take: When the issue was being discussed during the show Wednesday, it was trading at the $3,430 area, and the high from the after-hours spike of $3,478.25 was already in place.

Investors were alerted to the major resistance area at $3,500 up to the all-time high of $3,552.25 from September, if Amazon could breach the after-hours high.

“It is in my long-term portfolio and I may never sell it,” said co-host Dennis Dick. On previous shows, he's remarked that the issue may go to $5,000 eventually.

AMZN Price Action During The Regular Session: In the first minute of the session Wednesday, the issue spiked but found sellers, peaking at $3,434 and sharply reversing course.

By 10 a.m. it had trickled down to $3,335, and a rebound off that low was snuffed out at $3,409 around 12:30 p.m. ET, with Amazon continuing its move lower. 

The stock ended Wednesday's session down 2% at $3,312.53. 

Photo courtesy of Amazon.