Updated from 7/27 to correct a price in the last paragraph.
After a strong early run Thursday morning, which pushed Amazon (AMZN) - Get Report well into new high territory, the stock was hit with a steady flow of selling into the close. The stock finished the session with a 0.65% loss after being up nearly 3% at midday. The nasty downside reversal is continuing into the post-close session as investors react to less than stellar earnings results.
Friday morning's initial print will likely be one of the weakest opens for Amazon in years. This follows an extremely ugly key downside reversal during the Thursday session. Investors should be prepared for more downside before the dust settles. There is considerable downside momentum in place which could easily drive the stock below solid support.
Amazon will likely open below initial support near the $1017.00 area. The stock's multiweek highs are in this zone. AMZN consolidated below this area as it digested the post-earnings gain from its April 27 report. If $1017.00 is clearly taken out it will likely take some time for shares to regain their footing. AMZN bulls should remain patient while this extremely volatile end-of-week action plays out. The stock will settle in once again and offer patient investors a low-risk entry opportunity. This may take some time.
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