{"id":12288,"date":"2012-06-12T03:14:14","date_gmt":"2012-06-12T07:14:14","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=12288"},"modified":"2012-06-12T03:14:27","modified_gmt":"2012-06-12T07:14:27","slug":"amazon-triggers-post-earnings-short","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/06\/12\/amazon-triggers-post-earnings-short\/","title":{"rendered":"Chart Review: Amazon Triggers Post-Earnings Short"},"content":{"rendered":"

On May 18th, I wrote that Amazon.com (AMZN) had triggered a post-earnings short<\/a> by closing below the low of trading in the immediate aftermath of the last earnings report (at $220). However, I did not recommend pulling the trigger because the market was oversold at the time. Surprisingly, AMZN did not benefit from the market’s recovery from oversold conditions and instead just churned in place for several days. When it sold down with the market, AMZN generated a successful retest of its 50-day moving average (DMA). I missed a decent trading opportunity as AMZN lost 4.6% moving from the trigger point to its retest of the 50DMA.<\/p>\n

Since then, AMZN has twice failed to close above the $220 trigger point. Each failure came with an intraday fade that returned the stock below $220. It now looks like this resistance is firm and a short makes sense at this point. Moreover, the stock market is not oversold (although close to it<\/a>!). A reasonable stop loss could be set at $222, the high from the first test of $220 as resistance. Both the 50 and 200DMAs linger directly below as potential support. The chart below summarizes the setup. Note that stochastics are also essentially becoming overbought.<\/p>\n


\n
\"Amazon<\/a>
Amazon has steadily but slowly traded lower since gaining 15.7% following April earnings<\/figcaption><\/figure>
\nSource: FreeStockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

I am guessing that a successful break above resistance will motivate buyers to pile into AMZN’s stock. A break below the 200DMA will all but assure a fill of AMZN’s post-earnings gap up and lead to even lower prices.<\/p>\n

Be careful out there!<\/p>\n

Full disclosure: no positions<\/p>\n","protected":false},"excerpt":{"rendered":"

On May 18th, I wrote that Amazon.com (AMZN) had triggered a post-earnings short by closing below the low of trading in the immediate aftermath of the last earnings report (at $220). However, I did not recommend pulling the trigger because the market was oversold at the time. Surprisingly, AMZN did not benefit from the market’s … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[220,599,512,338,62],"tags":[495,398,1597],"class_list":["post-12288","post","type-post","status-publish","format-standard","hentry","category-earnings","category-internet","category-resistance","category-retail","category-technical-analysis","tag-amazon-com","tag-amzn","tag-technical-analysis"],"yoast_head":"\nChart Review: Amazon Triggers Post-Earnings Short - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/06\/12\/amazon-triggers-post-earnings-short\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Review: Amazon Triggers Post-Earnings Short - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"On May 18th, I wrote that Amazon.com (AMZN) had triggered a post-earnings short by closing below the low of trading in the immediate aftermath of the last earnings report (at $220). 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