Watching AMZN
A Potential Play in the Works
Dear Bottarelli Research Member,
In the spirit of “Cyber Monday,” we could have a home-run trading opportunity in shares of Amazon.com (AMZN – NASDAQ). As you can see from the chart below, AMZN is setting itself up for a bounce back above its 50-day moving average, and if this happens, AMZN could jump from $83.00 up past $90.00 in the blink of an eye.
This alone is a nice trading thesis, but what I really like about this play is the fact that the AMZN December 80 calls look very cheap. With AMZN stock currently trading at $83.23, these calls are $3.23 in the money and trade for $5.60. Considering the incredible volatility we’ve seen in Amazon lately, I think this is a very reasonable premium to pay for these calls. Plus, with a Delta of 66, these calls increase $0.66 for every $1.00 that AMZN stock moves up. So if we can time it correctly, we could have a powerful play on the horizon. If the markets can establish some sort of upside footing, then I’ll officially recommend this play. But for now, let’s sit tight on this one. Just consider this alert an official “head’s up” on a play that could soon be a recommendation.
Lock and load
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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