Optimism Runs High Ahead of Amazon.com, Inc. (AMZN) Earnings

Online retail giant Amazon.com, Inc. (NASDAQ:AMZN) will report earnings after the close tonight. The stock initially dropped out of the gate this morning, as traders digested the company's updated plans for a new air cargo hub in Kentucky -- a perceived threat to this package delivery specialist. But AMZN has since turned higher, at one point nearing its October record peak, and was last seen up 0.7% at $838.10. Based on recent sentiment, traders and analysts appear to be expecting higher highs ahead.

Beginning with the brokerage bunch, 90% of analysts following AMZN rate the stock a "buy" or better. And the average 12-month price target is deep into never-before-seen territory, at $929.10. Meanwhile, short interest on the stock dropped by about 10% during the two most recent reporting periods, and now represents just 1.5% on AMZN's total float.

Turning to the options arena, call buying has been popular for months, per AMZN's 50-day call/put volume ratio of 1.14 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- higher than 76% of the past year's readings. Meanwhile, the equity's Schaeffer's put/call open interest ratio (SOIR) is elevated, at 1.16 -- in the put-skewed 81st annual percentile. But data from the major exchanges shows that put selling has been more popular lately, with more than 1.23 puts sold to open for each one purchased over the last 10 weeks.

AMZN tends to make some hefty moves in the sessions immediately following earnings, averaging an 8.4% swing in either direction, over the past eight quarters. But history is in the bulls' favor, with six of these occurrences resolving to the upside. Currently, the market is anticipating a slightly narrower move than usual, pricing in a 6.9% swing for Friday.

From a technical standpoint, Amazon.com, Inc. (NASDAQ:AMZN) has been tremendous, adding nearly 58% year-over-year. The stock has been perched just shy of its record high for more than a week, with the 10-day moving average providing a solid layer of support.