Amazon (NASDAQ:AMZN) traded 10% lower on Friday morning, after beating Wall Street expectations for the bottom line but missing on the top line.
The ecommerce company reported earnings per share of $5.75 and total revenue of $56.6 billion, compared to analyst estimates of $3.08 and $57.1 billion. While guidance for operating income was on the mark, Amazon’s (AMZN) projections for revenue came in below analyst estimates.
With the holiday season approaching, CFO Brian Olsavsky cautioned, “It’s a difficult period for us to estimate. We’re bullish on Q4, but we’ll have to see how revenue comes in.”
Regardless of how Q4 shakes out, our outlook for the stock price cannot be described as bullish. As evidenced by today’s price action, it doesn’t take much to push a stock lower when the valuation is this high. Looking at the market cycles for AMZN on the chart below, we can see that it is in the declining phase of the current cycle.
This means there’s still plenty of time to fall before the cycle concludes. As it approaches $1600, the stock has multiple supports.
Yet our view is that lower prices are likely into late December.
Amazon (AMZN) Stock Chart with Weekly Bars
For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel.
Twitter:Â Â @askslim
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
