So it’s going to be a busy 24 hours for e-commerce and a busy evening for the FAANG components. That’s got investors on their toes, trying to size up the tech space. On Thursday evening alone, those four companies will comprise more than $5.3 trillion worth of market capitalization.
Investors will expect Amazon to report strong earnings like it did in the previous quarter and tell a good story about the fourth quarter, which captures Prime Day, Black Friday, Cyber Monday and the holidays.
Amazon is trading in a similar manner to Shopify ahead of earnings. The two have enjoyed monstrous rallies from the lows, but have been trading in a sideways manner since summer.
Like much of the tech space, Amazon stock peaked in early September. Its rally in October fell just short of retesting those highs, technically allowing a lower high to form.
While not bullish, the stock does have a bullish-looking technical pattern forming known as a cup-and-handle formation. That’s where a large U-shaped base has a modest pullback — the handle — and resumes its rise. This pattern is highlighted on the chart with purple lines.
On a bullish reaction, bulls will want to see shares reclaim the 50-day moving average and ideally, take out this week’s high with a move over $3,300. If Amazon does that, $3,500 resistance is back on the table.
A rotation over this level puts the all-time high in play at $3,552.25, followed by a possible move to the 361.8% extension near $3,649.
On the downside, traders should look for a close below last week’s low near $3,122 and the 100-day moving average. Below will put the $3,000 level in play, followed by range support near $2,900.
Below all of these levels puts the 200-day moving average on the table.