Trading AMZN Stock After Earnings

Amazon Stock Earnings Trade Idea: Post-Earnings Playbook

Key Concept:
For day and swing traders looking to capitalize on Amazon stock earnings volatility, fading an earnings move based on institutional participation and historical liquidity zones presents a high-probability opportunity. This trade plan for Amazon (AMZN) stock is designed to either short the stock if it spikes higher or go long if it sells off, using volume profile analysis and historical key price levels to time entries effectively.

How to Trade Amazon Post Earnings: Shorting AMZN on a Post-Earnings Spike

Sell Orders and Position Sizing

• Total shares in full position: 150
• Full position size: $35,448 (Adjust as needed)
• Weighted Average Entry Price: $236.32

Risk Management and Profit Targets

• Risk-Reward Ratio: 4:1
• No stop loss on the first two entries to allow flexibility if AMZN extends higher.
• Hard stop set at $240.57 to limit risk if the stock breaks higher beyond the expected rejection zones.

Amazon Stock Earnings Trade Idea: Going Long on an AMZN Post-Earnings Sell-Off

Buy Orders and Position Sizing

• Total shares in full position: 75
• Full position size: $15,844 (Adjust as needed)
• Weighted Average Entry Price: $211.25

Risk Management and Profit Targets

• Risk-Reward Ratio: 2.25:1
• No stop loss on the first entry to allow flexibility if AMZN extends lower.
• Hard stop set at $209.14 to limit risk if the stock breaks lower beyond expected support levels.

Why Are We More Skewed to the Short Side after AMZN earnings report on 06 Feb 2025 (AMC)?

• Our short position is twice the size of our long—this is intentional. Amazon stock earnings already showed a negative reaction, so the bias is for further downside.
• Three sell orders when shorting vs. two buy orders when going long, reinforcing that we expect greater downside probability.
• Both setups rely on statistical price levels from professional volume profile-based analysis, considering historic liquidity pools where institutional traders have previously reacted.

Institutional and Market Maker Influence on Amazon Stock Earnings Reactions

• Market makers often trap traders with false breakouts before a reversal.
• Institutions may increase their short exposure if price spikes into key resistance zones, leading to more selling pressure.
• Conversely, if AMZN sells off sharply into key statistical levels, institutions may cover shorts, and momentum traders may step in long.

Exit Strategy and Risk Management in Trading Amazon Post Earnings

• We exit long positions sooner due to the bearish bias, aiming for a 2.25:1 risk-reward ratio.
• We hold short trades longer, targeting a 4:1 risk-reward ratio.
• Our exits are before major price levels, ensuring we secure profits before the market fully reacts.

Trading Rules and Strategy Application for Amazon Stock Earnings Trades

• One trade per direction per plan. If we get stopped out, we do not attempt another entry in the same direction.
• If we profit from a short trade, we are still open to taking the long trade later if conditions align.
• Use this playbook as a second opinion to verify your strategy and timing.
• This playbook can apply to intraday trading or multi-day swing trading.
• Options traders can use this to time their trades based on our entry zones.

Trade AMZN Stock Post-Earnings at Your Own Risk

This is not a fundamental approach but rather a clean price-action and professional volume profile-based playbook. Unlike breakout trades, this playbook is centered on fading moves based on statistical market intelligence.

Amazon stock earnings provide more information than usual, giving us a better map and probability for success. However, we avoid overtrading—if stopped out, we move on. But this is just our opinion and you need to make your own.

📌 Remember: Always trade with discipline and at your risk only, manage your risk appropriately, and stay flexible in volatile Amazon stock earnings environments.

For additional insights and original views on how to trade post earnings, stay tuned to ForexLive.com. 🚀📉

This article was written by Itai Levitan at www.forexlive.com.