How Technician Traders Saved Amazon
Some movements in this market are so confusing, Cramer said Tuesday, they seem to have no rational explanation.
Take Amazon.com for example, which reported a disappointing quarter Friday that included a 9-cent earnings miss. Where profits came in at 45 cents a share, analysts had expect 54 cents. As a result, the stock opened down nearly 15 points from Thursday's close of $120.07 for a 12% decline.
This action, Cramer said, is what you would expect from a growth stock that just reported a big earnings miss. But then Amazon reversed its losses intraday and closed at $118.87, which was just $2 shy of its trading price before the quarter.
"I have to confess, I was completely befuddled by what happened," Cramer said. "It looked like the market was changing its verdict on Amazon's quarter. But nope, the quarter was still bad and there was no new information about the fundamentals."
As it turns out, Cramer learned that the move was being entirely fueled by the charts. What exactly happened? To find out, Cramer went to technical analyst Tim Collins. Watch the video for the Mad Money host’s full report.
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