You may have heard that at least one member of Congress wants the House Judiciary Committee and the Subcommittee on Regulatory Reform and the Commercial and Antitrust Law to look into Amazon.com Inc.'s (Nasdaq: AMZN) $13.7 billion buyout of Whole Foods.
Naturally, the financial news pundits are now floating the idea that the company could be in trouble – with one hedge fund manager even shorting the stock.
But here's the thing…
This isn't the first time Jeff Bezos has faced antitrust issues. In fact, back in 2015, the group Authors United asked the Department of Justice to investigate monopolistic practices. And you see what's happened to the stock since then.
So forget about these "doomsday" predictions the media heads love talking about – it's just for ratings.
This is the only thing you need to pay attention to right now…
It's Not About Antitrust Laws – It's About Amazon's Upcoming Earnings
Although the Amazon-Whole Foods merger must still pass a federal antitrust review, there isn't likely to be much of a challenge (if any) from the Trump administration. And honestly, I don't know that it would do anything detrimental to the stock even if there was a one.
Amazon's antitrust investigation is really just fodder for the mainstream media's ratings. It benefits them to bring on a bunch of pundits with contradicting views on the company's and the stock's future, not you. That's exactly why it's a bad idea to base your investing and trading decisions on whatever their latest headlines are. In fact, it could be fatal to your portfolio.
And I can tell you right now that AMZN is still looking good and is still trading near its all-time highs. So any type of pullback that may happen because of Washington, whether a price support or Fibonacci retracement, could actually be the perfect setup for a bullish trade.
The real news is its next earnings announcement, due out after market close on Tuesday, July 27.
Now, we've talked before about the importance of looking at how companies have performed over their prior earnings sessions…
So here's the price chart for AMZN that shows the last couple earnings announcements (marked with a green triangle with the "E").
I could show you the data where AMZN has reported higher-than-expected earnings per share (eps) in five of the last seven sessions – but it's not about that. To me, it's about what the stock did going into and coming out of the last four earnings reports reports.
And here's how it did…
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.