4 Trade Ideas for Amazon: Bonus Idea

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

Amazon, $AMZN, comes into the week approaching the all-time high at 189.50. This is in the midst of a Positive RSI Reversal (higher low in price with lower low in RSI) that has a target to 199. It is also at the 6th touch point in an Ascending Triangle (connecting the last 3 lows) with a target to 213.50 on a push over resistance. The RSI is rising in the bullish zone with the MACD positive and moving up. The Bollinger Bands® also appear to be opening higher. There is no resistance above 190. Support lower is at 182.50 then 176 and 174.50. Short interest is low under 1%. The stock does not pay a dividend.

The company is expected to report earnings next on August 1st after the close. The July options chain shows biggest open interest at the 170 put strike and big size at the 200 then 185 and 190 call strikes. In the August chain open interest builds from 200 to a peak at 170 then tails on the put side. The call side builds from 160 to a plateau from 180 to 210. The September chain has open interest spread from 180 to below 140 on the put side, biggest at 180. On the call side it is largest by far at 175.

Amazon, Ticker: $AMZN

Trade Idea 1: Buy the stock on a move over 190 with a stop at 182.50.

Trade Idea 2: Buy the stock on a move over 190 and add an August 180/170 Put Spread ($2.90) while selling the August 215 Calls ($2.25).

Trade Idea 3: Buy the July/August 200 Call Calendar ($4.30) and sell the August 170 Puts ($2.40).

Trade Idea 4: Buy the September 175/195/210 Call Spread Risk Reversal (40 cents).

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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 the June quadruple witching in the books in the books, saw equity markets a bit gassed after a good start.

Elsewhere look for Gold to continue its consolidation in the uptrend while Crude Oil moves higher in consolidation. The US Dollar Index continues the short term move to the upside while US Treasuries continue their short term move higher in the secular downtrend. The Shanghai Composite looks to continue the short term trend lower while Emerging Markets look to be on the verge of breaking consolidation to the upside.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong, especially on the longer timeframe, but with possible reversal or digestion candles this week. On the shorter timeframe both the QQQ and SPY could us a reset on momentum measures as both are extended and pullbacks are helping there. The IWM continued to go nowhere moving mainly sideways in the upper part of the 2½ year consolidation. 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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