AMZN Update

I've had a lot of emails about AMZN and I've been putting it on hold and waiting for something definitive to happen before looking at AMZN for any new or add-to position. Today we have at least 1 member making money in AMZN Feb puts, I think we are very likely to get another clean shot at AMZN with a little better timing. Why? Other than AMZN itself, look at the market, look at TBT, consider the futures overnight, everything from yesterday's analysis is playing out right now and that should also transpose to AMZN. There are quite a few things, the market being run up as TBT suggested yesterday in the very short term (maximum positive divergence on a 2 min chart) and that happening a day in front of the F_O_M_C which has been souring investors the last several meetings. I doubt it's very likely the F_E_D does anything big on the bullish side before the debt ceiling debate as they aren't going to want to let Congress off the hook and if they keep moving sentiment inside the F_E_D the way it has been going, then we are likely to hear about more QE doubts. The timing is all very intriguing, especially as the market has no real support of any kind and depended on the ramp of the EUR/USD exactly at 9:30 today.

 This is an ideal emotional extreme to look at AMZN, it's really hard on a big day up like Friday, but with everything we already know about AMZN and when you are looking for moves above resistance that will move emotion and see volume like that, it's an ideal day (this isn't to say every breakout should be shorted, there has to be a history of distribution there).

 I always start off looking at a new position with a 5 day chart, if a 50 day moving average is worthwhile, why wouldn't 20 or so days in 4 or 5 bars be useful? The point is you see larger trends that you wouldn't otherwise see. Momentum in AMZN has been fading, the break above resistance couldn't hold the highs and there was a lot of volume up there. The current candle is a bearish candle, similar to a shooting star, but not exactly one, the point is the same though, higher prices were rejected.

 on a 15 min chart the last move above a resistance area was pretty decent, it wasn't nearly as strong as this most recent one though, however in the larger scheme of things, this is really a myopic conversation, it's important if you are going to be playing options, but it you are going to be short the equity, 2 months from now the difference will be negligible.

 There are some small gaps or thin areas for price to move to, but I think this is less about that and more about the typical initial volatility after a failure like we saw the last 3 days.

 The positive AMZN divergence is only on a 1 min chart so this fits well with the chart above showing a 60 min bullish candlestick on heavy volume for a short term reversal or what would otherwise be chop in the trend, that's where your opportunity is.

The daily (longer term) momentum indicators show momo fading, RSI is not healthy here and the embedded Stochastics looks from some other charts to be coming undone, which is the only reason I use Stochastics, embedded signals and when they break.

I'll put this on the short term watchlist looking for the best area, I'd put it on your list as well for consideration. AMZN isn't different from MSFT or AAPL.

I will say I do feel much better already having exposure to AMZN short that's less than 1 % away from the current price with portfolio P/L loss exposure of less than 1/10th of 1%