October 28

$Amzn Amazon drops on Earnings. Is it a good time to buy?

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$Amzn Amazon drops on Earnings.  Is it a good time to buy?  Amazon had earnings last night and price dropped.    Right now, in pre-market, the price has gone from 818.36 to around 781.52.   Everyone was expecting a great quarter and that didn’t happen.    Two questions need to be answered here.   First, why was everyone expecting it to go up on earnings?   Second, what now?  Is it a good time to buy or sell?

Let’s deal with the first question.   What was the sentiment before earnings?

 

Here are the seasonal statistics provided by Alert Trades.  It was a 51% probability of going bullish with is not that great.  Almost, like “flipping a coin”.     Notice, for the last couple of years, it has been altering between bullish and bearish.   This year, it would be bearish.   Either way, there was nothing here to indicate that it was going to be bullish with high probability based on past statistics.  Let’s see if the charts gave anything.

2016-10-28_070942_amzn_oct

Here is the Quarterly chart from eSignal.  It shows price moving up drastically with only minor pull backs so often.   Notice, the red line support is way at the bottom.

2016-10-28_070618_amzn_q

Here is the Monthly chart from eSignal.   It is a big trend with very little pull backs too.2016-10-28_070618_amzn_m

Here is the weekly chart from eSignal.     This charts shows that $AMZN bottomed in Feb and started a new trend upwards with minor pull backs along the way.  No medium or pull backs at all.   The minor pull back is at 799.22 and the medium pull back will be at 752.94.    If we open were we are at pre-market, we would have broken the minor pull back level and price will start’s its journey to the medium pull back.   Remember, this is the weekly chart.   We have to wait for this week to end to see where we close and see which support holds!

2016-10-28_070618_amzn_w

Here is the Daily chart from eSignal.   The daily chart shows a bullish trend but a slight consolidation pattern at the top.   In fact, it made a lower high then before and the supports are moving which is not good for a bullish trend.    In fact, yesterday, it closed below the moving support and now indicates a major pull back can start to occur.   The Major pull back support is at 778.52.

2016-10-28_070618_amzn_d

 

In summary, the higher time frames indicated a huge move upward with no major pull backs.  Therefore, there is more reward towards to the bearish side instead of the bullish side.   The daily time frame indicated weakness for the bullish trend.    Seasonality showed only a 51% probability for bullish too. Therefore, there was no high probability towards to the bullish side.

Now the question comes too,,,,is it a time to buy.  There are two supports which are 778.52 and 752.94.    Unfortunately, we don’t have a iMTF™ to say which support is the strongest.    We have to watch price action today.    With the massive upward trend on the higher time frames, a trader should be looking for a pull back which will be a buying opportunity.

Here is the seasonal trends for November.   It shows a 84% probability of being bullish with an average price movement of 7.8%.      hmmmm!

2016-10-28_070942_amzn_nov

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