Did you catch the pop in Amazon (AMZN) this week? Here’s the trade…and some ideas for the next move. (March 31, 2017)

by DAN AMZN 
Amazon ( NASDAQ:AMZN ), FINALLY, after ALL this time, has broken out and actually is rewarding those folks who bought the stock at the last high. So how are we trading this stock? First of all we will just look at the MACD (that is the moving average convergence divergence), it is a trend and momentum indicator, and it is working pretty well. It is above the midline here (I am just looking at this zero line), and that means that technically the stock is in an uptrend. We know this, you don’t need a MACD line to show you that. Then we also see this crossover and it means that the momentum, the upward momentum is increasing. This is what we like to see.

If it is a COMPANY with those characteristics then you are looking to buy that company (we know Amazon, they are doing that too). Here we have a STOCK. The trade here has been like a low-risk buy back here at the 50-day moving average. Even buying here would have been fine, and even NOT buying here would have been fine. Once this stock breaks out above this level, above 860.00, we will even say 863.00, we get a nice 23 point run, which on an 800.00 and some odd dollar stock that is not that big a deal. But I have said this before, trading options on this, either buying calls or selling a bull put spread, that has generated some significant money to a lot of people. We made, I think, 75 or 76 percent at Option Market Mentor; I think it was in one day but it might have been in two, I frankly forget.

The point is (this is the best example I can see right now), you jump on these volatility squeezes early. And I am not talking about here, all this is is a squeeze. We don’t really have anything except a low-risk entry, we have had several of these along the way, I guess. But what I am talking about is, you identify these stocks as potential stocks and then, “Oh, this could be the time that it is going to break out, right?” Well, this could have been the time too. You see, this is what I am talking about. THIS, “Oh my gosh, I have got to buy this stock because it is going to blast off.” Well, not so fast. Now we are back here, not it is going to blast off. Boom! There it is. So you can WAIT for the move, use this to confirm that there is volume behind it, and then you watch this thing continue to go.

There have been several analyst upgrades calling for a $1000.00 stock, $1100.00 stock. Those are pretty significant upgrades. It might sound like, “Wow! That is a lot, 200 points.” Yes, but again, it is an $885.00 stock. So if it moves up to $1000.00, percentage wise, the way I look at it, for Amazon ( NASDAQ:AMZN ), that is a pretty modest price hike there. I am predicting a 12 percent move for Amazon ( NASDAQ:AMZN ). “Great! Thanks for your advise, really appreciate that. Sure glad I am paying those high commissions at one of the big brokerage firms, to get your wisdom.” Meanwhile, the rest of us just trade this volatility squeeze. This is still in what I call Phase 1, if you are a member you know what I am talking about.

As long as the stock keeps moving up, like no down days, this is a good thing. As long as long as we see these clear green surrounded boxes like this, this is all good. Ultimately, I think we are going to see quite a few more. So stay long Amazon ( NASDAQ:AMZN ) and then keep watching back here. Because when this stock starts pulling back we will talk about how to trade the next leg as well.

Free Chart