Amazon stock is trading down to new 52-week lows after its disappointing earnings announcement. Here are the key levels to know right now.
The action in Amazon (AMZN) – Get Amazon.com Inc. Report is not pretty after the company reported earnings after the close on Thursday.
In fact, the action in all of big tech has been rather horrendous, with the exception of Apple (AAPL) – Get Apple Inc. Report. The rest — like Microsoft (MSFT) – Get Microsoft Corporation Report, Tesla (TSLA) – Get Tesla Inc. Report, Meta Platforms (META) – Get Meta Platforms Inc. Report and Alphabet (GOOGL) – Get Alphabet Inc. Report— have all shown post-earnings weakness this quarter.
At one point, Amazon stock was down about 20% in yesterday’s after-hours session, although it pared some of those losses during the conference call.
Shares opened just below $98, lower by about 12% on Friday following the company’s disappointing quarter, as it beat on earnings and missed on revenue expectations.
Worse, its revenue outlook for next quarter badly missed analysts’ estimates.
The disappointing quarter and subsequent reaction looks like it will boot Amazon out of the $1 trillion club.
Trading Amazon Stock on Earnings Plunge
Monthly chart of Amazon stock.
Chart courtesy of TrendSpider.com
Amazon stock breached the $90 level in yesterday’s after-hours session, but how it trades during the regular-hours session will be more important.
The $100 level has been a very clear line in the sand. This level was resistance from 2018 to early 2020, until it broke out over this mark in April 2020 as consumers turned to online shopping amid the pandemic.
Throughout 2022, the $100 level has been significant support as well.
One level that stands out below $100? The 50% retracement from the all-time high down to the all-time low, at $94.36.
If Amazon stock can hold this level and reclaim $100, then the bulls may have a long trade on their hands with a risk level at roughly $94.
However, if Amazon cannot reclaim $100, then bulls risk this key pivot level turning into resistance. If that’s the case, I don’t know that we can lean on $94 to $95 as strong support.
The $100 level is much more critical and if it can’t be reclaimed and held, then bulls risk Amazon trading lower.
Could that eventually put the covid low in play near $81? It would be a big decline, but technically speaking, it’s possible and during a bear market, it’s certainly possible.
If Amazon stock does reclaim $100, I want to see how it handles a potential rally back toward $120, as well as a test of the 10-day and 10-week moving averages.
