What Amazon's Chart Says a Week Before Earnings

Key Points

• Amazon shares are holding steady just below major resistance at $240.
• Multiple bullish tailwinds suggest traders are simply waiting for next week’s earnings to get clarity.
• There are two clear ways to play it: buy early or wait for the numbers to confirm the next phase has begun.

Amazon.com Inc. NASDAQ: AMZN is entering one of its most critical weeks of the year. With earnings due next Thursday, the stock is coiled just below its long-standing $240 ceiling—a level that has beaten every attempt by the bulls to break it since February. However, while the bears have repeatedly tried to drag it lower in recent weeks, so far they’ve failed.

Instead, Amazon has been quietly consolidating, holding its ground just 10% below all-time highs.

The setup suggests that, after a 30% rally since April, investors are waiting for fresh numbers before committing to the next leg higher. There are plenty of reasons to be excited: Amazon’s chart remains technically constructive, its fundamentals are strong, and broader macro conditions are supportive. Whether you build a position now or wait for a confirmed breakout, the path forward looks increasingly bullish.

A Textbook Consolidation Pattern

Over the past couple of months, Amazon's price action has been defined by patience rather than panic. While it has yet to break through the triple top we’ve been highlighting around the $240 mark, the lack of a meaningful pullback is a bullish signal. Every dip has been met with buyers stepping in, and Amazon continues to hold higher lows.

The stock’s Relative Strength Index sits around the low-40s, reflecting a neutral setup that gives it a lot of room to run, and suggests we’re looking at a stock that’s resting more so than being on the verge of rolling over.

Though there have been some bumps, Amazon remains in the same broader uptrend that began in December 2022. Even the 30% selloff last April looks more like a technical reset within that longer-term climb. As long as shares remain above $210, August’s low, the bulls remain firmly in control.

Fundamentals Point to Further Upside

Beyond the chart, Amazon’s fundamental momentum continues to drive optimism. Its cloud unit, Amazon Web Services (AWS), remains a powerhouse, with analysts continuing to flag its growing market share amid the AI-driven boom. Recent reports point to “very robust” enterprise AI demand, suggesting AWS could surprise to the upside when results hit next week.

Meanwhile, the company’s retail and advertising divisions posted solid growth. Combined with what looks like strong performance from their Prime Days event earlier this month, which often acts as a springboard for year-end results, Amazon is going into this earnings report on the front foot.

Add in risk-on investor sentiment for tech stocks, a relatively stable macro backdrop, declining interest rates, and strong consumer demand, and there’s every reason for investors to be excited. 

2 Clear Ways to Trade It

The question now is how to play it. With the stock stuck between $210 support and $240 resistance, investors have two clear choices.

The first is to build a position now. This approach assumes that Amazon will deliver another strong quarter and break through resistance to fresh highs. The potential reward here is capturing the initial upside burst that could take shares to $260 or beyond if the report exceeds expectations—and that’s being conservative.

Goldman Sachs recently raised their price target on Amazon to $275, while Wells Fargo increased theirs to $280, and Mizuho raised theirs to $300. That’s about 40% in potential upside at the high end of the range; not bad for a $2.3 trillion stock. 

The Wait and See Option

The second option, of course, is to take the more cautious approach and wait for confirmation. In this scenario, investors would let next week’s earnings do the talking. If Amazon delivers another strong report and breaks through $240 on heavy volume, it would confirm that the next phase of the rally has begun.

That move would also turn the long-standing resistance line into a new support base for the rest of the year. The advantage here is lower risk, and you prioritize certainty for a safer, albeit smaller, potential upside. 

Either way, it’s hard to go wrong. Amazon remains one of the hottest stocks in the market, and there’s every reason to think next week’s earnings will only reconfirm that.