Amazon.com, Inc., Wal-Mart Stores, Inc. Brace for a Showdown

Amazon.com, Inc. (AMZN) and Wal-Mart Stores, Inc. (WMT) will square off tomorrow, with both companies offering deep discounts

Jul 14, 2015 at 11:05 AM
facebook twitter linkedin


In case you missed it, tomorrow is "Prime Day" -- and Amazon.com, Inc. (NASDAQ:AMZN) is pulling out all the stops for members of its subscription service, to celebrate the e-tailer's 20th anniversary. In fact, the company promises that the one-day shopping event will offer "more deals than Black Friday," and they've already published a partial list of discounted products. Among them, AMZN's Fire TV Stick will be $15 off and its Kindle tablet will be $30 off.

Not to be outdone, rival Wal-Mart Stores, Inc. (NYSE:WMT) announced its own sale, featuring 2,000 "rollbacks" for online customers. The retailer also said it will offer "special atomic details," but has yet to provide specifics. Suffice it to say, competition between the two companies is growing to be fierce.

Turning to the charts, AMZN has been an all-star -- hitting a record high of $464.99 earlier today, after UBS upgraded the stock to "buy" from "neutral" and raised its price-target hike to $550 from $450, citing Prime subscriber growth and fulfillment strength. The shares were last seen up 1.6% at $463.04. In fact, since the year kicked off, the shares have soared over 49%.

However, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have exhibited skepticism. The stock's 10-day put/call volume ratio of 1.12 ranks in the bearishly skewed 92nd annual percentile. Echoing this, AMZN's Schaeffer's put/call open interest ratio of 1.14 outranks nearly three-quarters of comparable readings from the past year. A capitulation among these doubters could lead to future gains for Amazon.com, Inc. (NASDAQ:AMZN).

Meanwhile, WMT has been muscling its way higher since hitting a two-year low of $70.36 on July 1, up close to 4.5% at $73.52. What's more, the stock appears to be bouncing from its 50-month moving average, which could set the stage for additional upside -- especially if analysts start to raise their outlooks. Currently, 17 of 21 brokerages rate Wal-Mart Stores, Inc. (NYSE:WMT) a "hold" or worse.
 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners