Amazon.com, Inc. (AMZN) Stiff-Arms Bears on Run to Record High

Amazon.com, Inc.'s (NASDAQ:AMZN) staggering technical run continues -- and bears can't be happy

by Josh Selway

Published on Nov 4, 2015 at 2:40 PM

Amazon.com, Inc. (NASDAQ:AMZN) has been on a dazzling technical run in 2015. Coming into today, the shares had more than doubled, thriving on the heels of not one, but four bull gaps since January. More recently, the stock's gains can be attributed to a standout quarterly report from late October. AMZN was last seen 3% higher at $643.81, earlier hitting another record high of $645.93. 

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Looking at the stock's sentiment backdrop, it appears one group of traders successfully dodged AMZN's most recent surge. Short interest dropped by 16.5% during the two most recent reporting periods. Now, the shares controlled by short sellers don't even make up two days' worth of buying power, going by AMZN's average daily trading volumes. 

Elsewhere, though, it's possible option traders are getting burned by the technical outperformer. The equity sports a 10-day put/call volume ratio of 1.02 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This reading outranks four-fifths of all others from the past 12 months, revealing an unusual interest in put buying in recent weeks. Of course, some of these put buyers may be shareholders hedging against an unexpected pullback.

Adding to this bearish bias is the fact that option traders have been displaying their skepticism in other ways, as well. Over the past five days, the weekly 11/6 630-strike call has seen the biggest accumulation in open interest. However, data from the major exchanges confirms that a majority of these positions were actually sold to open. This means traders have been betting on the $630 level to act as a short-term ceiling through the end of this week, when the contracts expire -- a hope that's looking increasingly unlikely.

Today's option data shows continued interest in the weekly 11/6 series. The most popular option today is the 640-strike call. This time, it appears speculators are buying to open the contracts, betting on continued AMZN success through Friday's close. 

Analysts appear to be in the right when it comes to Amazon.com, Inc. (NASDAQ:AMZN). In fact, 23 of the 28 brokerage firms that cover the stock say it's a "buy" or better, with none calling it a "sell." Additionally, AMZN's average 12-month price target resides in never-before-seen territory, at $720.11. 

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