 Welcome traders to another tick mill earning season preview with me Patrick London before jumping to today's report as always want to adhere to the risk disclaimer and most pertinent to today's presentation is the fact that views and opinions expressed on me are solely mine they're not indicative or representative of those held by tick mill UK or tick mill Europe limited okay let's jump into today's report and we are looking at Amazon Amazon set to announce earnings after close of trade in New York this evening the consensus earnings per share is for 22 cents based on revenue of 126.4 billion company has guided for a 13 to 17 percent increase in sales to reach 125 to 130 billion and a 3.5 billion dollar operating income sales growth hasn't been an issue recently but operating income has been tough to come by operating income has taken a significant hit since the pandemic hey day initial boost of pandemic spending economic stimulus and the increased online shopping have given way to unpleasant aftershocks first while the company initially benefited from the stimulus supporting the economy the rising wages and tight labor market eventually added billions in costs to the bottom line this was prevalent in the mid to late 2021 and continues to be an issue going forward next we have logistical issues that played the supply chain the much of the 2021 period and those challenges have remained in place throughout 2022 this has cost to an already tight retail margin this also contributes to inflation globally and in the US we all know that inflation is having costs for fuel and well just about everything else strong dollar has put massive dent in international results sales in this segment were down 12 percent for the Q2 year-over-year but only 1 percent when adjusted for foreign currency exchange operating income fell to 362 billion dollars to a month at 362 million dollars gain sorry to a monster 1.8 billion loss last quarter management has done an admirable job of execution in this challenging environment through the first half of 2022 gross margin has fallen slightly over 1% in fact the most significant expense increase isn't in fulfillment as you what one might expect spending on technology and content has risen the most through the first half of 2022 Amazon's web services the largest cloud services provider on earth is Amazon's cash cow and has been the lone consistent profit center lately segment produced 19.7 billion in sales last quarter and 5.7 billion in operating income Amazon reported a 79 billion dollar run rate of annualized sales for web services last quarter and total sales will likely eclipse 80 billion this year Amazon's cloud business consistently post operating margins near 30% okay let's take a look at some of the statistical trading patterns around the Amazon earnings release Amazon shares have moved lower in the immediate aftermath of earnings eight out of the last 12 reports on average stock has moved down 0.4% on the first day of trading after announcing based on the previous 12 earnings releases Amazon is more likely to trade lower one day after earnings from average loss of 0.3% on average so the stock has moved higher by 1% one week after earnings from a volatility perspective what can we expect well the options market is pricing in a 7.3% move on earnings stock has actually averaged a 6.2% move in recent quarters from a flow and sentiment perspective well we have 20 681 contracts of the $120 call expiring on Friday so some bullish sentiment there in the near term at least although option order flow sentiment in general has been bearish in line with market sentiment the Amazon share prices drifted down 14.3% post its prior earnings announcement using the last 12 quarters of date the average drift between earnings is about 4.3% up or down let's pull up the Amazon chart and see if we can identify any near-term trading opportunities from a technical perspective my bullish or bearish line in the sand at the moment is this $112 level whilst we're trading above there and we are currently sitting on the high volume node here on the four hour chart 115 I've been looking for any move back through the 120 120s to engage on the long side initially targeting a move up into the 123 handle then we have this 126 gap fill zone here and so that will be the next logical target for me on the upside if we can get through there we then look for monthly range resistance just below 130 we have a 130 83 technical upside objective then we have another gap just above there coming in at the 135 level so those are my upside targets if we can hold this 112 on the downside if we take out the 112 on the downside then I'm bearish and I'm looking for a move back into test price cycle lows 105 if we take out that 105 we've got the yearly s3 here on the weekly chart at 99 59 and if we get a close below there on a weekly basis I would then be looking for a move down to test the 84 38 level as the next downside objective but for now like I say constructed above 112 and we're looking for those mid 120s 130 and then mid 130s as the technical upside objectives as always train us plan the trade trade the plan and most importantly and enjoy this until next time thanks very much