4 Trade Ideas for Amazon: Bonus Idea

• Posted by Greg Harmon
• on February 26th, 2024

Here is your Bonus Idea with links to the full Top Ten:

Amazon, $AMZN, comes into the week pressing up to 33 month highs. The Bollinger Bands® are open higher to allow a move. There is resistance from 2021 at 177 and 180 then 185.50 and 187. There is a target to 200 from a trigger of a Cup and Handle at the beginning of November above. Support lower comes at 172 and 168.50 then 167. Short interest is low under 1%. The stock does not pay a dividend. The company is expected to report earnings next on April 25th.

The March options chain shows the highest open interest at the 160 put strike with big size at the 195 call followed by the 200, 190 and 185 strikes. In the April chain open interest is spread from 160 to below 140, biggest at 155. On the call side it is biggest from 175 to 185. The May chain has biggest open interest at the 150 put strike and shows deep open interest from 165 to 200 on the call side.

Amazon, Ticker: $AMZN

Trade Idea 1: Buy the stock on a move over 175.50 with a stop at 168.50.

Trade Idea 2: Buy the stock on a move over 175.50 and add an April 165/155 Put Spread ($1.70) while selling the April 195 Call ($1.53).

Trade Idea 3: Buy the April/May 185 Call Calendar ($3.50) while selling the May 155 Puts ($2.65).

Trade Idea 4: Buy the May 155/180/190 Call Spread Risk Reversal ($1.05).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with 1 week left in February, saw that large cap and tech focused equity markets showed resilience with a rebound to new highs after a weak start.

Elsewhere look for Gold to continue in consolidation near the highs while Crude Oil consolidates in a broad range. The US Dollar Index now looks to reverse to drift to the downside while US Treasuries pullback in their downtrend. The Shanghai Composite looks to continue the reversal higher while Emerging Markets consolidate.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts look strong, especially the SPY and QQQ on the longer timeframe. On the shorter timeframe both the QQQ and SPY may be setting up for a reset as both have momentum divergences. The IWM continues to flirt with a break out. Use this information as you prepare for the coming week and trad’em well.

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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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