On July 24, 2014, AMZN
printed out the results for its second quarter that ended June 30, 2014. Despite their net sales increased by 23% to $19.34 billion in the second quarter, their operating loss was $15 million compared with operating income of $79 million in the second quarter 2013. Their net loss was $126 million in the second quarter, or $0.27 per diluted share, compared with net loss of $7 million, or $0.02 per diluted share, in second quarter 2013. The share price dropped 10.04% on the news. Now, the question is do you buy or short from here? It depends on which side of the fighting force do you believe. You need to have to tools at your hand before you make a call. First, you need to check why the price gaped down big time or why the stock was punished. This will require you to have some kind of financial background or a simple basic understanding of how to read the financial report to see if things are worsening or getting better, what to hope next 12 months and beyond, and secondly, you need to have a good skills of reading the chart and see if there were any warning signs before the earning which will give you a kind of understand so next time you can position to avoid a big disaster. The headlines did not help the stock either but forget about bears out of the cage and try justify their belief that $AMZN will not deliver long waited results and will end in a disaster. Being both technician and from financial background... I see mixed signals from both fields. Fib fans had enough warning that price will have difficult to break upside decisively above the golden ratio which was enough warning not only that was a warning but also got the confirmation of a few other lines which all fall at this level. What may also have been a good case was the Pitchfork
fans had a good reason to believe that price failed the second median line
with a bearish evening star
which also is a reliable all these were enough warnings that the V-shape recovery from April
Low is facing stiff resistance overhead and it proved right. Although there is a good case that suggest the gap will get filled if market extends its current bullish
mood next few months, but if market corrects, this downward momentum will even accelerate and April
lows will be ideal target .