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

by Alex Eppstein

Published on Jul 14, 2015 at 11:05 AM
Updated on Jul 14, 2015 at 11:08 AM

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.

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