AMZN historically outperforms in April and in the second quarter
Amazon.com Inc (NASDAQ:AMZN) is headed for a 10.6% monthly drawdown in March, after a 10.7% drop in February. The blue-chip e-commerce giant hasn't logged back-to-back double digit monthly losses since 2011. Now trading at $189.78, at their lowest levels since October, the shares have taken a 21.8% haircut off its their Feb. 4 record high of $242.52, but a short-term bounce might soon be in the cards.
This is because the stock is entering a period of bullish seasonality. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, AMZN is an outperformer in both the upcoming month and for the second quarter. Over the last decade, AMZN finished April higher 80% of the time with an average 6% pop.
The stock is second on the list of the White's best S&P 500 (SPX) stocks to own in the second quarter, going back 10 years. The equity managed nine second-quarter wins during this period, averaging a hefty 12.1% gain.
An unwinding of pessimism could provide tailwinds, as puts have been much more popular than usual in the options pits. AMZN's 10-day put/call volume ratio of 0.48 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 84% of readings from the past year. So while calls still outflank puts on an absolute basis, the high percentile suggests the ratio is on an uptick that nears an annual high rate.
Now looks like an great time to weigh in with options, with one specific strategy in mind. The equity's Schaeffer's Volatility Scorecard (SVS) sits at a 19 out of 100, making it a prime premium-selling candidate.