AMZN Earnings Momentum

## AMZN Earnings Momentum — Full Methodology

### Pre-Earnings Setup

1. **Earnings surprise filter:** Only enter if the EPS beat/miss exceeds analyst consensus by ≥ 5%

2. **Revenue confirmation:** Revenue must also beat consensus (double-beat setup)

3. **Gap analysis:** Measure the opening gap on the first post-earnings trading day

### Entry Criteria

1. **Gap direction:** If gap up ≥ 2% and first 30-minute candle closes above the open → long

2. **Gap direction:** If gap down ≥ 2% and first 30-minute candle closes below the open → short

3. **Volume:** First 30-minute volume must be ≥ 2× the average first-30-minute volume of the last 20 trading days

4. Enter at the close of the first 30-minute bar

### Exit Rules

- **Profit target:** 5% from entry (AMZN's average post-earnings drift)

- **Stop loss:** Close of the gap (gap-fill exit — thesis invalidated)

- **Time stop:** Close after 10 trading days

### Position Sizing

- Risk 1.5% of portfolio per trade

- Earnings trades carry elevated risk — never exceed 2% risk

### Best Market Conditions

Works best in trending markets where sector momentum supports the direction of the earnings surprise. AWS revenue growth is a key catalyst — monitor cloud spending trends. Less effective when broader tech sector is rotating.

### Backtest Notes

Tested on AMZN earnings events from Q1 2018 to Q4 2024 (28 earnings reports). Includes after-hours gap modeling. Slippage is higher around earnings — modeled at 0.10%.