#AMZN Bias & Levels Update for Thursday June 23, 2016 by @mocktrade
I do not currently have a position nor a Strangle in AMZN ahead of the Brexit vote but I am
seeing AMZN as a definite stock
which should be hedged just in case the overall US stock market’s reaction is
bearish for equities following the Brexit vote regardless of stay or not.
What I am taking note to is while AMZN has been the strongest of the FANG stocks (especially compared
to NFLX & GOOGL) AMZN has now also
failed to breakout to new highs for more than 6 straight weeks along with
volume decreasing dramatically over the past 6 weeks as well except during the one
day AMZN sold off a bit this past
Friday.
Decreasing volume at/near ATHs is usually not a good sign for further upside with legs (or at
least is a sign for limited upside) no matter how solid a stocks fundamentals are,
which is also usually a sign odds are more in favor for a meaningful pull-back before
resuming higher.
If not for the potential of a positive market outcome following
the Brexit vote my mindset would definitely be thinking AMZN should be heading to 685s-682s
zone before making another attempt at new ATHs;
however if equities rally post the Brexit vote a AMZN bearish scenario will likely be negated and new ATHs will also be very likely, but with
AMZN struggling to make new highs
for so long (6+ weeks) on decreasing volume I would be hedging my AMZN exposure via short-term Puts if I
was currently in a Long position.
If an AMZN
bearish scenario does follow the Brexit vote and if also breaching below 682s the hedge via Puts would protect
the potential for/if AMZN started to head to the next lower target at 665s-660s zone.
If below 660s the line in sand (LIS)
for buyers would be 649s-647s zone
otherwise odds will favor a move to 630s/29s
and possibly lower.
Ethan Premock Futures & Options Strategist at Hamzei
Analytics, LLC
