Options Trading News

October 21, 2011  Fri 12:22 PM CT

Amazon.com's earnings announcement after the market closes Tuesday will be important for the Nasdaq 100 and the consumer discretionary sector, given its heavy weighting in those areas. To that end, there are some key technical levels to watch on the e-tail giant's chart.

I have drawn in three moving averages on the daily chart below that could be important. If the earnings report is relatively neutral, we might see a move up to the 10-day moving average, shown in pink. That moving average was last at $237.23.

A move to the lifetime high at $246.71 could also be in the cards on a report that is positive but not spectacular. Because the stock is so close to its all-time high already, it isn't possible to project where AMZN might go based on resistance. A 10 percent move or more has not been uncommon when the company reports quarterly results that are better than consensus estimates, so we could see a move above $250.

On less favorable news, the shares could edge down to the 50-day moving average, shown in orange. That moving average was last at $218.

On more extreme negative news or outlook, the stock could go to the long-term uptrend support line--its 200-day moving average. That moving average was last at $196.69.

AMZN is trading at $231.95 this afternoon, off 0.71 percent on the day.


(Chart data provided by Thomson Reuters)
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