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# Amazon.com, Inc. Message Board

• blust34442 blust34442 Dec 5, 2009 7:03 AM Flag

## Downside target price using Fibonacci analysis

Followup to my December 3 posts:

Now we have established that \$145 is the short term top. What should be your target price to cover or sell your puts?

This rally started from \$95 after Q3 earning report. The major movement is \$50.
(\$145 - \$95 = \$50)

The three target prices are to retrace 0.62, 0.5 and 0.38 of the major movement.

\$50 x 0.62 = \$31
\$50 x 0.50 = \$25
\$50 x 0.38 - \$19
\$145 - \$31 = \$114
\$145 - \$25 = \$120
\$145 - \$19 = \$126

So one of \$114, \$120 and \$126 should be your target price.

Coincidentally, \$120 and \$126 are also the target prices according to resistance/support lines using technical analysis as the day after Q3 earning report, AMZN gained 25% to \$120, then the next day it gained another 5% to \$125. \$120 and \$125 are the stops from bottom way up. They should be the stops from top way down.

My conclusion is that you should sell your December puts when it hits \$126. For people having longer horizon, your target price should be spread among the three targets. You should sell/cover one third of your position at a time when AMZN hits the three target prices.

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