4 Trade Ideas for Amazon: Bonus Idea

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

Amazon, $AMZN, rose out of a 5 month consolidation at the end of the year. It pushed higher to a top in February before falling back to retest the bottom of the consolidation. It then began a run to a new all-time high into April. After a shallow pullback to the 20 day SMA. It made another high and then dropped again. It ended last week pushing up off of the 20 day SMA again.

The RSI is pushing back higher in the bullish zone, but there has been a negative divergence lately. The MACD is moving steadily lower, relieving some stress. The Bollinger Bands® have turned sideways. There is resistance at 2443 and 2475 then 2500. Support lower comes at 2383 and 2354 then 2310 and 2255. Short interest is low under 1%. The stock does not pay a dividend. The company is expected to report earnings next on July 23rd after the close.

The June monthly options chain shows the biggest open interest at the 2400 strike and then 2300 on the put side. On the call side it is biggest at 2400 and 2500 but sizable at 2300 and 2600 as well. In the July options the July 2500 put is the largest open interest looking for downside. On the call side it is biggest at 2500 as well with good size at 2400 and 2600. In August, the first chain to cover the earnings report, size is building but small on the put side. On the call side the 2500 and 2600 strikes are leading the way.

Amazon, Ticker: $AMZN

Trade Idea 1: Buy the stock on a move over 2450 with a stop at 2410.

Trade Idea 2: Buy the stock on a move over 2450 and add a July 2440/2380 Put Spread ($35) while selling the July 2590 Call ($35).

Trade Idea 3: Buy the June/August 2500 Call Calendar ($95) and sell the July 2300 Put ($41).

Trade Idea 4: Buy the August 2250/2450/2600 Call Spread Risk Reversal for free.

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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 month of May in the books, sees equity markets have renewed their trends higher.

Elsewhere look for Gold to consolidate in its uptrend while Crude Oil may be resuming its uptrend. The US Dollar Index is starting to move lower while US Treasuries consolidate. The Shanghai Composite looks to continue the broad drift sideways while Emerging Markets consolidate in their uptrend.

The Volatility Index looks to continue to drift lower making the path easier for equity markets to the upside. Their charts also look strong, especially on the longer timeframe. On the shorter timeframe the QQQ is breaking out of consolidation with the SPY pushing higher and the IWM consolidating the range break over support. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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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