As one of the most popular kids on the Wall Street Block any news about Amazon gets a lot of attention. But all of that attention can push the online behemoth’s value a bit out of whack. This is not Amazon’s first rodeo with threats of restrictions due to their smothering market control. The drama that will ensue sets up a couple solid opportunities.
First, watch for the overselling to cool and a bottom to form.
A pretty reliable sign will be the recovery of the MACD. It plunged with the news of the lawsuit and has put it into buying territory for the first time in months. But don’t catch a falling knife.
This presents the second opportunity. Grab a put option with a relatively short term expiration, say October. Pull in that income until AMZN finds support and starts to reverse.
The 120 strike put options for Oct 20 are at about 1.90. They could provide a quick return before the selling eases. We will keep an eye on this and watch for the reversal and the confirmation of signals to go long.
Keep learning and trade wisely,
John Boyer
Editor
Market Wealth Daily
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