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  • vornash Jul 20, 2013 12:40 PM Flag

    Why I'm Short

    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

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