Amazon (AMZN) has been the poster boy stock of late. The mega-cap name with strong growth prospects has seen an amazing surge in share price recently as funds become more and more selective. And as Amazon’s 2Q earnings approach (due out after the bell), the AMZN stock has jumped over 15 percent.
According to estimize, analysts are expecting a loss of 17 cents per share on 22.31 Billion in revenue for Amazon 2Q earnings.
Due to the recent surge, shares are now overbought on the weekly chart (see below). In fact, AMZN is sporting its highest weekly Relative Strength Index (RSI- 14) reading since 2009. Note as well that the stock price is above the upper bollinger band. The last two breaches of the band have marked multi-month peaks… but only after they stopped going up.
AMZN Weekly Stock Chart – Price reflects higher expectations into Amazon 2Q earnings…
From a technical perspective, it’s worth keeping an eye on the following price areas: 445, 425, and 410.
The options market is pricing in a 44 dollar move on Amazon 2Q earnings. A move of that size lower would see price re-test the base breakout and 10 week moving average.
Obviously the risk seems to be to the downside, but that’s a pretty impressive recent base breakout. And, as traders know, overbought can always become more overbought.
Either way, Amazon is a big name so traders will be watching their earnings to gauge the tone of the market heading into tomorrow’s session. Â Thanks for reading!
Twitter: Â @ATMcharts
The author does not have a position in the mentioned securities at the time of publication. Â Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
