Amazon.com Stock Brushes Off Potential Criminal Probe

AMZN touched a 21-month low yesterday

Digital Content Manager
Mar 9, 2022 at 9:23 AM
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The shares of Amazon.com, Inc. (NASDAQ:AMZN) are up 2.1% at $2,778.02 this morning, as investors brush off news that the House Judiciary Committee has just requested that the Justice Department begin a criminal probe of the e-tail giant. The Wall Street Journal reported that a letter seen by the paper accuses Amazon of possible criminal obstruction of Congress by failing to provide information requested by lawmakers as part of an antitrust investigation into its competitive practices. 

Yesterday, the stock hit its lowest level since June 2020, as the equity feels the weight of several major moving averages including its 50-day. The move also put AMZN below a recent floor at the $2,750 level, too, and bringing its year-to-date deficit to 18.4%. Today's move higher has the equity set to open back above the region, however. 

Analyst sentiment still remains incredibly high. The security earned a bevy of post-earnings bull notes in early February, and these analysts have maintained their positions since, with all 29 in coverage calling the stock a "buy" or better. What's more, the 12-month consensus price target of $4,099.88 is a 47.5% premium to current levels. 

Options traders, on the other hand, have been extremely bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 10-day put/call volume ratio of 1.11, which stands higher than all other readings from the past year. In other words, long puts haven't been more popular than they've been during the past two weeks. 

Short-term options traders have also been quite put-biased. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.13, which stands higher than 73% of readings from the past year. 

 

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