Will earnings encourage Amazon (AMZN Stock) investors to go for new highs?

Amazon Inc. (NASDAQ: AMZN) traded lower on Tuesday, after it hit resistance at 3710 on Monday. That said, the stock hit support at 3585 and then, it traded in a consolidative fashion. Overall, Amazon continues to trade above the upside support line drawn from the low of March 5^th, and thus, we would consider the medium-term outlook to still be somewhat positive.

Today, after the closing bell, the company announces its earnings results for Q2, the last quarter with Jeff Bezos at the helm. Amazon has seen its earnings and revenue skyrocket amid the coronavirus pandemic, but although analysts expect both EPS and revenue to rise again, they see a slower pace than in recent quarters. Thus, for the stock to conquer new highs in the next days, a positive surprise may be needed.

If so, we could see another test near Monday’s peak of 3710, where a break could target the record high of 3772.27, hit on July 13^th. However, in order to start examining whether investors are willing to continue sailing north, we would like to see a move above 3800. With no prior highs and inside swing lows to mark the next potential resistance zone, we will consider as such an obstacle the 3900 territory.

Shifting attention to our short-term oscillators, we see that the RSI lies flat near its 50 line, while the MACD stands fractionally above its zero line, but slightly below its trigger lin. Both indicators detect lack of directional momentum and thus, we prefer to wait for a break above Monday’s high of 3710 before we start examining the prospect of a trend continuation.