Like many, I am kicking myself for not entering AMZN yesterday. On Thursday, I featured it as a breakout-pullback candidate. When I made my trades yesterday, I came very close to taking a 500 share position at around $44.40, but decided against it for two reasons. First, I had made my buy entry closer to the the breakout, between $44.00-44.20. Second, the fact that earnings would be reported scared me. Now, I'm sitting here thinking about the $5000 I passed up :(
In all seriousness, I have no problem with passing on the trade pre-earnings. You never know how that will go. However, the fact that I held out because of 20 cents was a bonehead move. As I've noted in the past, I tend not to be very precise with entries. I am a swing trader looking for at least 1-5 point moves, so in the grand scheme of things, 20 cents doesn't mean much.
Now back to AMZN. If we look at the chart history, it looks like a high probability short setup. It's always risky shorting an uptrending breakout, but this stock has not handled extremely overbought RSI levels well. Take note of past overbought RSI levels (70-90) on the chart below. If you were willing to hold on for a little while (at least a month), you would have made a lot of money. Will this trend continue? I may take a small position (no more than 400 shares), at $55, betting that it will. I would not recommend this trade for the faint of heart, and I certainly will set a stop after entering.
I welcome reader thoughts on AMZN. Are you long or short? You can leave a comment or e-mail at SinghJD1@aol.com