My thinking is as follows, it's at the top of a trend line in a well defined up-channel structure, and at the top of a bollinger band (indicating overbought). We have peers missing earnings like MSFT, GOOG, and EBAY. Retail is down and increasing oil prices may increase Amazon's cost of shipping as a percentage of revenue (as FedEx warned). The upside risk seems low for the short term at least. Plus, most analysts are bullish and have been.
But I have no illusions about a stock in an uptrend like that though. If it doesn't go my way in the next week, I'll either take profits or let my stop get hit at 306. Amazon is a great company for customers, but not so much for stock holders. A revenue miss could send this stock tumbling down significantly 5-10%, which is what I'm shooting for. Additional downside is less certain. I'm not going to sit on this thing stubbornly as it rockets higher and higher. But don't be surprised if we see 275 soon. Long term this channel will be broken one way or another, and the last time it broke a channel like this it was to the downside to correct.
Sentiment: Strong Sell
I'm still short. I removed the tight stop loss 3 minutes before the open due to the pre-market movement. We re-tested the top of the channel. If my stop had been triggered during normal market hours I would have re-applied a short between 309-310. I'm not going to let a silly pre-market ramp job trigger my short at the open.
What if you had a crystal ball and you knew that amzn would miss both top and bottom line? Would you short it big time? Well when amzn report q4 2012 results they missed both top and bottom line. The stock rallied. I agree with the shorts here. Amzn is a long term dog. But there is no gaurantee that investors will suddenly realize the intrinsic value of amzn.
I don't buy at the top of a channel, even on an uptrend. That's just asking to be hammered for 5-15%. The risk/reward ratio is not there. If Amazon hits the bottom of the up-channel and bounces, then I might buy. But that is going to be around 260-275 depending on how long it takes to get to that level.
I agree with your thinking but agree that you don't want to cover at 306 before earnings. Heck, that's only 75 cents above current price. I plan to hold my short at least through earnings. After that it just depends on how the overall market is trending. If you believe Sybil, we hit 350 next week. LOL
You are braver than me then. I don't trust this thing any further than I can throw it, which isn't far. There's a reason why short interest is less than 2% in this stock, shorts have been battered and mutilated, which presents opportunity but also risk. If we break above 306 I may execute a short from a higher position pre-earnings.
With an average daily range of 5 to even 10 per day, a stop that close will not give breathing room for a one week trade? The market maker will get the stops close to market price as they have a computer program that figures out if they will make a profit by tripping the groups of stop orders at various levels. Once a stop is triggered it, becomes a market order that is subject to the honesty of the market maker. I once had a stop filled slightly but obviously off of the market price, which was only somewhat annoying to me, but if they do that regularly they make serious money, so after that I try to never use a market or stop order on nasdaq. Although, I expect the large volume stocks are a little less susceptible.
I'm fairly confident we will stay below 306 next week. If we break it I will short from a higher position prior to earnings. I am shorting from the 307.1 level, so I am just protecting myself against some rogue ramp pre-earnings.
Depends on your risk tolerance. A break below 300 will bring us down to 290-292, to fill the gap. If 290 breaks there's a lot more downside. I would have to feel it out like you said. I would probably move my stops down to a level I feel comfortable with to protect profits.
Sentiment: Strong Sell