Amazon (NASDAQ :), the Seattle-based online retail giant, was already doing well before the COVID-19 pandemic brought the world to a halt last year. But once lockdown measures were in place, forcing large swaths of the world's population to seek shelter, reducing consumers' shopping options, the company has.
So much so that the company exceeded expectations yesterday when Amazon reported Q4 2020 results.
The real surprise at yesterday's conference call were the remarks of founder and CEO Jeff Bezos, who said he will "step down as CEO and become executive chairman" this summer, to devote all his time and energy to new products and early-stage initiatives. Bezos hands over the reins from the CEO to Andy Jassy, ??currently head of the company's highly successful Amazon Web Services (AWS) division. However, Bezos said, “We fire on all cylinders, just as the world needs. We have things in the pipeline that will continue to amaze us. "
The fourth quarter results of the megacaps technology company were indeed dazzling. Sales were up 44% year-over-year to a record $ 125.6 billion, an increase of $ 87.4 billion and an increase of $ 96.1 billion in the previous quarter. Net income was $ 7.2 billion, yielding earnings per share of $ 14.09, an increase of $ 3.3 billion, or $ 6.47 earnings per share … more than double. The company's results have clearly decimated expectations.
With the fundamentals so robust and Bezos' words about more product upstream in the future, the balance of supply and demand on the tech map also looks promising.
Amazon extended the upward breakout of a falling flag by completing a symmetrical triangle in the direction of the uptrend. The flag tilts in the opposite direction of the trend, like a catapult.
This continuation pattern is created by the shift of forces, between bulls that enjoyed the prior 8% increase in just three sessions, from January 19-21, and traders who missed it but are determined to push that move to the other. side to repeat. side of the flag. Profit-taking pushed the flag lower as the newcomers took a few steps back to gain speed so prices could continue to rise.
That momentum also allowed the price to break the horizontal resistance of USD 3,365, which has been in effect since Nov. 5, and then through the top of the symmetrical triangle.
Note: Yesterday's trade developed a doji within a heavy-volume bullish hole, after a long green candle. This could turn out to be the ingredients of an evening star, a bearish pattern. We discussed this rare bearish pattern in December with regard to Amazon, but the potential for downward momentum appears to have waned.
Unless there is an unforeseen black swan event related to the company or unlikely relevant negative news is revealed, we expect the overwhelmingly positive fundamentals and technical factors to outweigh this bearish potential.
Trading Strategies
Conservative traders should wait for the price to clear the doji high, followed by a return move verifying support above the symmetrical triangle.
Moderate traders would wait for any buying dip.
Aggressive transactions can take a long time, provided they understand and accept the risk of a lack of confirmation and filters, and can hold on to any fluctuations. For this, a cohesive trading plan is even more important than usual.
Here's just one example.
Trade Sample
Admission: $ 3,380
Stop Loss: $ 3,280
Risk: $ 100
Target: $ 3,980
Reward: $ 600
Risk: Reward Ratio: 1: 6
