Our Post-EPS Scenario for AMZN Turns Out Correct
On Wednesday, we noted Amazon (AMZN) was vulnerable to serious weakness, and we all know what happened after it reported earnings Thursday evening.
Here’s what we wrote: “As AMZN approaching earnings Thursday evening, it is up against some serious technical challenges. Let’s notice that the post-May advance has retraced exactly 62% of the Jan-May correction, which means that 360-365 represents stiff resistance to any further strength. That said, at yesterday’s high of 362.93, AMZN had climbed 28% off its May low in a pattern that exhibits recovery recovery rather than ‘new up leg’ form.
“If my pattern analysis proves reasonably accurate, then AMZN in fact is nearing the completion of a three-month recovery rally in an incomplete larger, still-developing intermediate-term correction off its January 2014 all-time high at 408.65, ahead of another down-leg that should revisit and likely break below 284.38 in the weeks/months ahead.
“At this juncture, only a positive and sustained reaction to EPS that hurdles 365 will argue for a run at 380 next. Any other post-EPS scenario will leave AMZN vulnerable to serious weakness.”
Amazon closed the week at 324.01, down 34.60, or nearly 10%.
More Top Calls From Mike
This past Monday September 19, Mike Paulenoff alerted MPTrader members to an emerging setup in Raytheon Technologies (RTX), noting:
One of the recurring themes I read about that threads through coverage of the Russian-Ukraine conflict is that the vast amount of materiel sent to Ukraine from NATO countries to help Zelensky and his army fight Russia is older equipment and weaponry that sooner than later will have to be replaced by the donating countries.
On the afternoon of September 12, the day before the consequential August CPI report was released, Mike Paulenoff alerted MPTrader members to a key inflection point in the QQQ, writing:
The QQQ is strong ... heading towards a confrontation with its key resistance zone from 312.80 to 316.15 where my work expects QQQ behavior to inform us about the true underlying dominant trend-- to the upside in an extension of the June-August advance, or to the downside in extension and completion of the Aug-Sep.
On August 8, Mike Paulenoff was asked for chart analysis on CHPT by an MPTrader member.
Before the opening bell, Mike responded with the following chart-based commentary:
CHPT (ChargePoint Holdings)is getting a lift from the so-calledInflation Reduction Actmostly because of the feel-good reaction to the $7,500 electric vehicle tax credit (if you can afford to buy an EV in the first place) as well as earmarked funds supposedly heading for building out charging station infrastructure.
On Friday morning August 26, Jay Powell delivered a very brief, but considerably more hawkish-than-expected Jackson Hole speech that for all intents and purposes ended and reversed the 19% recovery rally advance in the SP.
That afternoon, with AAPL down 3% to 164.65, Mike Paulenoff posted a heads-up alert about AAPL to MPTrader members that called for continued downside in the most widely-followed name in the averages, writing:
AAPL has pressed beneath its prior pullback low at 166.
Mike Paulenoff called this past weeks sell-off in AAPL ... and the market in general.
On Thursday Aug 18, with AAPL at 173.84, Mike told his MPTrader members: I am in the camp expecting the latter downside scenario, notwithstanding The Streets newfound love affair with the company.
The next day, he wrote: AAPL is pressing on key initial support at 171.60/90, which if violated will point to 168-166 next [and] put downward pressure on SPX, SPY, ES.
He updated his downside target to 164.80-162.