Here’s your trade on Amazon ($AMZN) (December 28, 2020)
AMZN SPY QQQ AMZN
Today, for the first time in quite a while, I want to look at Amazon ( NASDAQ: AMZN ), and here’s why: This stock has actually been a real sluggish underperformer for quite a while. You look and see what Amazon ( NASDAQ: AMZN ) has done since September and compare that to the S&P ( NYSEARCA: SPY ), compare that to the QQQs ( NASDAQ: QQQ ) particularly. After the sell-off the Nasdaq has actually been working pretty well. Amazon ( NASDAQ: AMZN ) has just kind of been drifting around putting everybody’s feet to sleep.
Well, today this thing broke out on some pretty strong volume; the highest volume that we have seen in quite a while, other than one sell-off here where the stock did sell-off, heavy volume. But where is it today? For the first time it is actually ABOVE this day’s trading. The stock traded there so everybody that bought was a loser, they have been a loser, they have been a loser, then boom. Now suddenly, they are all winners and we all like winners more. They are better looking, they are skinnier, they are in better shape, and they are in better moods.
Now what do we have? We’ve got the stock up here and this is the way I could envision this stock going, I don’t know for sure. But I can see this stock running like this; just kind of slowly drifting up. We might see a big squirt where the stock just runs up, I don’t know how that’s going to happen, maybe it would. But what I don’t see could always happen. I’m not being predicting here but what I don’t see is this kind of thing. I don’t know why Amazon ( NASDAQ: AMZN ) would, after the way it’s acting here, and then it’s forming this little consolidation here; I don’t know what it would take for Amazon ( NASDAQ: AMZN ) to sell-off a lot, I just don’t see it.
This is the type of pattern that I am looking for. And if you are an option trader you can make a lot of money on a $100.00 move. But as a stock trader, this isn’t the kind of thing that you are just going to just shoot the lights out. But it is a stock that I think at this point, because of the way it closed today, I think this could be a reliable trade and I would at least focus on 3,200.00, I wouldn’t put a stop there but I would say this if the stock pulls back to 3,200.00, that’s really too deep. The stock shouldn’t pull back to 3,200.00, it should really stay above there. A little pullback is okay, a big pullback is not.
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