Amazon Stock Lands Double Dose of Pre-Earnings Bull Notes

Amazon earnings are due out tomorrow after the close

Managing Editor
Jan 29, 2020 at 9:34 AM
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FAANG name Amazon.com, Inc. (NASDAQ:AMZN) is up 0.6% this morning at $1,863.38 after receiving a double dose of price-target hikes out of BMO and Deutsche Bank. The brokerage firms raised to $2,150 and $2,275, respectively, the latter of which represents a nearly 23% upside to last night's close of $1,853.25. This bullish sentiment is the norm, as coming into today 30 of 32 covering firms were sporting a "buy" or "strong buy" recommendation.

Earlier this week, AMZN suffered a brief pullback that was neatly contained by the 50-day moving average, and quickly sent the equity back into positive territory by yesterday's trading. The e-tailer has been a weak performer in the short term, but over the past 12 months it sits on a 13% gain. 

In the options pits, call traders have been favoring the online retail giant. Data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows Amazon stock with a 50-day call/put volume ratio of 1.49. This ranks just 2 percentage points from an annual high, meaning calls have been purchased over puts at a quicker-than-usual clip.

Looking ahead, Amazon is slated to report quarterly earnings after the close tomorrow, Jan. 30. During the past two years, AMZN has closed lower the day after reporting in four of eight reports. In this time frame, the equity has averaged a 3.2% post-earnings swing, regardless of direction. This time around, however, the options market is pricing in a larger-than-usual, 5.7% move in either direction.
 

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