Friday, 25 July 2014

AMZN - smacked lower on lousy earnings

Amazon (AMZN) was smacked a very significant -12% lower in the early morning, after EPS of -27 cents, verses an expected -15. AMZN settled moderately above the lows, -9.5% @ $324. The Friday daily candle is suggestive of a recovery early next week.

AMZN, daily

AMZN, weekly


Without question, AMZN saw truly lousy earnings for Q2, even worse than the cheer leaders were hoping for, as if an expected loss of -15 cents would have been 'good'.

AMZN remains one of the most bizarrely valued companies in the entire US market. AMZN is one of the most badly run multi-national corporates out there. How can you have global sales of $70/80bn, and still fail to turn a profit? Capitalism.. and retail business.... at its worse.

Daily reversal

In terms of price, AMZN did close the day with a pretty clear reversal (hollow red) candle, which is suggestive of upside next week. However, there will now be stiff resistance in the 350/360 zone.

Even if the market can power into the sp'2100s later this year/early 2015, AMZN will face serious problems in re-taking the $400s.. which are now a major ceiling.

*I would never trade the stock, even though I think it is over-valued by a factor of TEN. Indeed, I've been on the 'divide by ten' train with AMZN since I started this blog in spring 2012.

At some point the delusion will break, but for now, this is not likely the 'grand top', not least if the broader market is going to break new highs.