Everyone is bullish on Amazon — what that might mean for investors ahead of earnings

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Amazon.com Inc. investors should be warned that Wall Street may be a bit complacent on the e-commerce and cloud giant’s stock, ahead of the first-quarter...

Amazon.com Inc. investors should be warned that Wall Street may be a bit complacent on the e-commerce and cloud giant’s stock, ahead of the first-quarter earnings report due out after Thursday’s close.

An options strategy referred to as a “straddle,” which is a pure volatility play that involves the simultaneous purchase of bullish and bearish with identical at-the-money strike prices, is prepping for a 4.2% move in the stock in either direction on Friday. Read more about options straddles ahead of earnings.

And after KeyBanc Capital analyst Edward Yruma upgraded Amazon to overweight last month, the bullish calls became unanimous, with all 45 analysts surveyed by FactSet rating the stock the equivalent of buy.But as some analysts have pointed out, it’s not like the bullish consensus is a sudden phenomenon. At least 90% of the ratings have been bullish since October 2017, with the non-bullish ratings being neutral, or hold.

From a technical perspective, the weekly moving average convergence-divergence indicator , known affectionately as Mac-D, has flashed a buy signal starting from negative territory for the first time in years, since early 2015 according to FactSet. Keep in mind that last quarter’s disappointment was relatively short-lived, as the stock was recently trading 9.8% above where it was before the fourth-quarter report was released.

 

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