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Amazon Stock Has Two Key Support Levels to Watch After Earnings Dip

Amazon stock is selling off after reporting its first earnings results without Jeff Bezos as CEO. Here's two key support levels to watch.

In its first quarter without Jeff Bezos at the helm, Amazon  (AMZN) - Get, Inc. Report failed to deliver the goods.

Shares were down about 7% in pre-market trading, shedding roughly $250 a share. Amazon stock was down 6.9% to $3,350 on Friday at last check.

That comes despite an easy beat on earnings, but a rare revenue miss. Worse, guidance disappointed Wall Street analysts, acting as an additional selling catalyst.

While a stock split doesn’t technically alter the value of a stock or company, just look at Tesla  (TSLA) - Get Tesla Inc Report or Nvidia  (NVDA) - Get NVIDIA Corporation Report to see how it can impact the stock price.

Investors have been clamoring for a stock split from Amazon, but management apparently sees things differently.

As we tiptoe into the second half of 2021, investors were hopeful Amazon would continue to push higher after its latest breakout. Now those hopes are being dashed.

Let’s look at the chart.

Trading Amazon Stock

Daily chart of Amazon stock.

Daily chart of Amazon stock.

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Shares are working off a recent pullback, but Friday’s open will have Amazon near the first of two potential support zones.

The $3,350 area isn’t as clean of a resistance mark as $3,550 is, but this former range resistance level sticks out on the chart. When paired with the 21-week moving average, this is the first support level to watch.

The question is, does Amazon open near this level and bounce or does a meager rally attempt get sold and shares head even lower?

If it bounces, keep an eye on $3,409, which is the current July low. Above that and the 50-day moving average may be in play, followed by $3,500.

Amazon may bounce, but I’m not looking for a massive reversal on the day. At least, not at this point.

Should we get a less-than-enthusiastic bounce or should Amazon simply flat out fail to hold the $3,350 area as support, let’s look down toward the $3,250 to $3,270 area.

In that range, Amazon will find its 200-day and 10-month moving averages. More importantly though, the 50-week moving average is in this area. This measure has been significant support throughout 2021.

If we get a decline to this area, it may be worth watching Amazon for a potential low to trade against.

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