AMZN Relatively Unchanged Amid Deluge of Headlines

Year-over-year, the security remains up 60%

Digital Content Manager
Mar 29, 2021 at 11:31 AM
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The shares of Amazon.com, Inc. (NASDAQ:AMZN) are nearly flat this morning, up less than 0.1% to trade at $3,053.10 amid news that Amazon Web Services (AWS) is announcing a brand  new partnership with Ikon Science to develop a cloud-based software product that facilitates data accessibility and removes barriers to knowledge. Ultimately, the solution will allow companies to save on human resources and capital investment, and increase safety. Separately, the company is being sued by a fulfillment worker in California on allegations that it did not provide scheduled meal breaks for employees. Amid all these headlines, JPMorgan Chase made the tech giant a “top pick,” noting it could show sustainable growth at a sensible valuation.

On the charts, the security has struggled with overhead pressure at the $3,200 mark over the past several weeks. It has been a rocky road for Amazon stock since it hit a Sept. 2, all-time high of $3,552.25, with shares pulling back to the $2,870 level before making at least four failed rally attempts between October and February. Now, AMZN seems to have found footing at the $3,000 area, and sports a 60% year-over-year lead.

Analysts are overwhelmingly bullish towards the security, with 29 of the 33 in coverage sporting a "strong buy" rating, while the remaining four say "buy." Plus, the 12-month consensus target price of $3,999.36 is a 31.9% premium to the stock's current perch.  

The options pits reflect that optimism, with calls popular. This is per Amazon stock's Schaeffer's put/call open interest ratio (SOIR), which sits in the eight percentile of its annual range. In other words, short-term option traders have rarely been more call-biased. 

Now seems like a good opportunity to weigh in on AMZN's next move with options, too. The security's Schaeffer's Volatility Index (SVI) of 26% stands lower than all but 5% of readings from the past 12 months, indicating the equity is sporting attractively priced premiums at the moment.

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