AMZN has been one of my favorite stocks to trade for the past three years.\u00a0 It usually offers excellent price action for a few days before and after its quarterly earnings report.\u00a0 I have found that watching it trade in the after market once it releases its numbers is very instructive for the next trading day.<\/p>\n
Immediately following the release of its numbers AMZN droppped a few points.\u00a0 But frankly I was somewhat surprised that the down move wasn’t more vicious.\u00a0 It basically reported an in line number, which usually would result in it getting pummeled.<\/p>\n
The first identifiable seller appeared at 89.50.\u00a0 It quickly traded down to 88.\u00a0 When it traded back up to 89.50 it appeared to be a great opportunity to enter a short trade.\u00a0 But the seller suddenly lifted and it quickly traded above 90 forcing our traders who were short to cover their positions.<\/p>\n
AMZN then traded below 89.50 again and the offer did not lift.\u00a0 Then a large seller held the offer at 88.80 which resulted in the stock trading down to 87 fairly quickly.\u00a0 Eventually AMZN traded down to 85 where it put in a double bottom.\u00a0 Its failure to hold below 85 caused our traders who were short to cover their positions.\u00a0 Over the course of the next hour it traded all the way back to 88.\u00a0 It closed after hours trading at 87.66<\/p>\n
I don’t consider the after hours session to be particularly bearish.\u00a0 Clearly the gains that AMZN made during the regular trading session were erased but it closed almost 3 points above its after market low.\u00a0 In the premarket tomorrow I will pay close attention to the 87 level.\u00a0 If it holds below I will look to get short and cover at 85 until it proves it can hold lower.\u00a0 If it holds above 87 then I will be long and look at 88 and 88.80 for resistance.<\/p>\n
Right on the Open I will be quick to take profits on both the long and short side as there is a high probability of at least two reversals prior to it establishing a trend for the day.<\/p>\n","protected":false},"excerpt":{"rendered":"