Bulls Keep Buying as Amazon.com, Inc. (AMZN) Outperforms

Amazon.com, Inc. (NASDAQ:AMZN) is one of a few retail stocks in the black today

May 11, 2016 at 2:24 PM
facebook X logo linkedin


With seemingly every other retail stock reeling amid earnings-related sector headwinds, there's one familiar outperformer: Amazon.com, Inc. (NASDAQ:AMZN). The e-commerce stock hit another all-time high of $717.88 earlier, and was last seen up 1.8% at $715.41. What's more, today's pop has AMZN options traders betting on even more upside through week's end. 

More specifically, AMZN calls are trading at roughly twice the average intraday clip. The weekly 5/13 series, which expires on Friday, is immensely popular, accounting for the three most active AMZN options. Traders are targeting this series' 710-, 715-, 720-strike calls, likely opening long positions at each option. By doing so, they're betting on AMZN to extend its run into record-high territory through Friday's close. 

Despite AMZN's technical success, this is actually unusual behavior from its short-term options traders. The stock's Schaeffer's put/call open interest ratio (SOIR) comes in at 1.28, which tops 80% of all readings from the past year. In other words, Amazon.com speculators targeting options that expire within three months are much more put-skewed than normal

Either way, it's a prime time to bet with AMZN options, from a pricing standpoint. That is, the stock's Schaeffer's Volatility Index (SVI) of 24% sits in the low 13th annual percentile, meaning premium on near-term AMZN options are attractively priced at current levels, from a volatility perspective. 

A quick look outside the options arena shows, unsurprisingly, an overwhelming bullish tilt among analysts. Twenty-five of the 29 brokerage firms covering the stock say it's a "buy" or better, while none consider it a "sell." Moreover, AMZN was recently a recipient of a price target that caught all of Wall Street's attention

Taking a moment to quantify Amazon.com, Inc.'s (NASDAQ:AMZN) dazzling run up the charts, the shares have surged 66% in the past 12 months. Helping the stock today are comments from former Apple Inc. (NASDAQ:AAPL) CEO John Sculley, who told The Street he thought Amazon.com's cloud business -- Amazon Web Services -- was worth $100 billion by itself. Meanwhile, this positive price action had AMZN in overbought territory even before today's gains, according to the stock's 14-day Relative Strength Index (RSI) of 72, so the stock could ​technically​ be due for a short-term pullback. 

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI