Amazon Earnings Trade Ideas

Amazon, $AMZN, leapt higher in April following their last earnings report and has held the gap up consolidating in a broad range between 210 and 230 since. The Relative Strength Index (RSI) is bullish and caught just below the mid line, with a Moving Average Convergence Divergence (MACD) indicator that is negative. Divergence. Support lower is found at 214 and 207 followed by 200 and a gap fill at 196.36. There is resistance higher at 230 and 240 followed by 246.71. The reaction to the last 6 earnings reports has been a move of about 9.3% on average or $20.25 making for an expected range of 198 to 238.50. The at-the money weekly Straddles suggest a $20 move by Expiry tomorrow. Option activity favors the put side.

Trade Idea 1: Sell the August3w 180 Put for $1.05
A move 20% lower will likely be bought.

Trade Idea 2: Sell the Weekly July 205/235 Strangle for $7.70.
A bet it stays in the range.

Trade Idea 3: Sell the Weekly July 205/235 Strangle and buy the August Monthly 205/235 Strangle for $3.50
A bet that the Implied Volatility sucks out of the weekly Strangle and it stays within the range tomorrow.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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