Stock of the Day: Amazon

In today’s Stock of the Day, let’s look at Amazon, which published its earnings report yesterday after the market closed. While the earnings beat expectations, the forward guidance disappointed investors. As a result, Amazon is set to open around 7% lower, a sharp move that confirms a change in sentiment.

Technically, this drop is significant. Before earnings, Amazon was trading inside an ascending wedge pattern, marked with black lines, that had been forming since April. Wedge patterns often indicate an impending reversal, especially when price action tightens and momentum fades.

This lower open means a decisive breakout to the downside, which gives us a clear technical sell signal. The structure of the wedge is now broken, and the chart opens up to a larger bearish correction. This setup is reinforced by negative signals across the broader market — particularly the bearish engulfing candles seen on the S&P 500 and Nasdaq daily charts.

As long as Amazon stays below the wedge, sellers are in control, and downside pressure is likely to continue.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-amazon-10