Started out as an online bookseller in 1995 in Jeff Bezos' Bellvue, Washington garage, Amazon (NASDAQ:) has grown into an online retail giant. It has surpassed Walmart (NYSE:) as the most valuable retailer in the US by market capitalization.
Currently the company is the world's largest online marketplace and has used technological innovation to aggressively conquer or become a major player in entire industry segments, including retail, live streaming entertainment and cloud computing. During the COVID pandemic, Amazon was in a unique position to provide Americans in place and in lockdown with just about every shopping and entertainment necessities they could consume.
At the same time, Amazon has also made a strong claim in the cloud space. Amazon Web Services expanded in a heartbeat by 40%, just .
The company is expected to report earnings on Thursday, July 29, after the market close. Analyst consensus calls for earnings per share of $12.24, 18% above the same statistic for the year-ago quarter, which beat expectations nearly 7 times at the time.
But if life returns to normal, will Amazon be able to maintain this dizzying rate of growth? While the e-tailer may seem like a juggernaut, we also expect that when the economy picks up again, home-bound consumers will shift their spending to the physical world, a form of entertainment that many consumers have sorely missed.
On the other hand, the Delta variant hinders the reopening of the global economies, a possible reason why Amazon's stocks continue to beat. But while the stock remains on an upward trajectory, at least for now, we recognize the potential for a pullback.
In early April, the stock overcame a bearish pattern, showing a shift between the outlook for a pre-pandemic economy and ongoing lockdown pressures – the optimal environment that keeps consumers at their computers, buying products and logging into entertainment to keep themselves up to date. to cheer up.
That pattern lasted 11 months. When a structure fails, it undergoes a forced reversal, a catalyst for momentum, ready to take off for a moment before it stops.
The price formed a rising channel, the path through which traders reached all-time highs. After the stock found resistance at the top of the channel two weeks ago, the stock recovered last week, erasing half of the previous week's losses. Perhaps as bulls pushed prices above the top of the triangle, it became a new support, which we can first see as a resistance, as the price spiked above that level on April 26 and was forced to close the week significantly lower, forming a long upper shadow.
Trading Strategies
Conservative traders should wait for stocks to sink back to the bottom of the ascending channel, demonstrating continued support.
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Moderate traders would wait for the same decline, for an entry close to support, not necessarily for trend confirmation.
Aggressive traders may short on evidence of resistance at the $3,750 level, all-time highs, before joining the uptrend with the rest of the market.
Note: Trading is nothing more than 'happiness management'. Professional traders do not have the illusion that anyone knows what is going to happen per trade. Instead, they try to get on the side of the statistics, knowing that the trade can lose every time. The above is our interpretation of technical analysis. We may be wrong, but even if we're right, it doesn't mean that what happened in the past will necessarily happen again today. And even if you do, how you manage your trade can be the difference between winning and losing.
Therefore, a coherent overall trading strategy and tight trading plans are critical to trading success. You have to develop your own style that suits your budget, temperament and of course timing. We will provide you with trading examples so you can learn from them as a way to develop your own examples. Don't expect them to necessarily win, or you'll fail to act and blame us, the market, and everyone else except your own lack of experience and responsibility.
Trade example: Aggressive – Short
Admission: $3,700
Stop Loss: $3,775
Risk: $75
Goal: $3,400
Reward: $300
Risk: Reward Ratio: 1:4
