Amazon has issued a fantastic earnings report. The lockdown economy has forced people to largely rely on online shopping, which has greatly benefited the e-commerce giant.
What I noticed from the Amazon chart was that it had been on a sideway move for the past 6 months or so and had formed a textbook flag as shown below. The earnings report would basically make it either break out to the upside and back down again inside the flag. The bullish breakout should be very bullish for Amazon technically speaking as if the TA rule applies, it can move up by nearly 1000 points given the size of the flag with a very long pole. Honestly I didn't expect it to break out just yet as it seemed to me Amazon had already priced in a lot of good news prior to the earnings report and was quite overbought. So I thought I might just be chopping around within the flag again. Of course I was wrong for most of today until the last minutes. Last evening, its initial reaction was to jump by 7% and even at today's opening, it was still up by about 5%. Nevertheless, it cannot hold up the gain and has given back the euphoric move and closed in red. This is utterly bearish! I think AMZN will move down towards the low bound of the flag, i.e. around 2900ish in the weeks ahead!
With respect to trading, I don't need to be exactly right to make money. Sounds unbelievable, right? Well, with some special option technique, I can still make money even if I'm wrong. Here is my today's profit, which is largely from Amazon trades for both ends (bullish for the downside and bearish for the upside). I'm just betting for a wide range for it without a need to be precise on its prices as long as it is within the range. That's the beauty of option strategy that allows us just to do that!😇😷
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