Amazon.com, Inc. (AMZN) has attracted a lot of upbeat attention lately
Online retail giant Amazon.com, Inc. (NASDAQ:AMZN) has climbed 2.1% to $705.58 today, after the company reported it will add 50 new products to its "Dash Buttons" lineup -- allowing customers to reorder certain staple goods with the press of a button on a small wireless device. Amazon also said that Dash orders grew by 70% over the last three months alone. Elsewhere, customers seem to be getting excited about an upcoming Prime Day, though Amazon has yet to set the date, and last year's event was somewhat of a letdown. In fact, AMZN has been getting a lot of hype -- and bullish attention -- recently, but there may not be enough buying power left to drive the shares much higher.
On Monday, Morgan Stanley called out AMZN as one of its 28 recommended post-"Brexit" buys, noting that the company's profitability is unlikely to be affected by the U.K. referendum result. This just echoes the attention AMZN has been getting from analysts of late. Currently 87% of brokerage firms following the stock call it a "buy" or better, without a single "sell" on the books. Plus, the average 12-month price target of $802.68 sits deep in all-time-high territory.
Speaking of all-time highs, AMZN just hit a record peak of $731.50 earlier this month. But Friday's drop saw the shares fall below their 40-day moving average -- a trendline that had been providing support since early March. And even with its months-long rally, the stock has added a relatively modest 4.4% so far in 2016, including today's climb.
Traders seem to be expecting more gains for AMZN, though. Short interest on the security fell by more than 15% during the most recent two-week reporting period, and now accounts for just 1.3% of the stock's available float. This suggest there's not much buying power left on the sidelines to help propel AMZN back to record highs.
Options traders have been placing bullish bets, too. AMZN's 10-day call/put volume ratio of 1.17 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than two-thirds of the past year's readings.
Bullish or not, it may be an attractive time to pick up AMZN's near-term options, as premium should be pricing in fairly low volatility expectations, per the stock's Schaeffer's Volatility Index (SVI) of 21% -- in just the 32nd percentile of its 12-month range. Moreover, Amazon.com, Inc. (NASDAQ:AMZN) has a Schaeffer's Volatility Scorecard (SVS) of 89 -- indicating the market has underpriced the stock's ability to make outsized moves in the last year.
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