AMAZON SINKS NEARLY $150 PER SHARE ON DISAPPOINTING Q4 GUIDANCE

Amazon is currently trading at 1655-lower by about 7.14% as compared to the previous closing. In Pre-market trading on Friday, the stock was down as much as 7.37% over yesterday’s close. The stock has pared some of its losses after the opening bell.

Amazon reported its Q3 earnings after the market closed on Thursday. The online retailer’s earnings beat market estimates, but its revenue and fourth-quarter outlook fell short of market expectations.

Amazon reported EPS of $5.75- above the market estimates of $3.14. The company’s revenues for Q3 were $56.6 billion- below the market expectation of $57.10 billion.

Amazon indicated Q4 revenue guidance in the range of $66.5 billion and $72.5 billion, well below consensus estimates of $73.79 billion. The fourth quarter is the biggest and most important sales period for the company because of the holidays.

Amazon’s Q4 operating income guidance of $2.1 billion to $3.6 billion was also below the market expectations of $3.9 billion. The company also said that the wage increase announced earlier this month was incorporated into the guidance but declined to quantify its impact.

On the technical front, the RSI is currently at 37.03% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is below the middle line of the Bollinger bands and is heading downwards.

Overall Bias is Negative and short-term trades can be initiated with tight Stop Loss and Profit targets.

TRADE SUGGESTION-LIMIT SELL AT 1670 TAKE PROFIT AT 1630  STOP LOSS AT 1690

 

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