Rethinking Amazon, and Staying Away
I have written here previously about shorting Amazon, and if you played the trade and held on long enough, it paid off nicely.
But with this recent earnings report, I think my original assessment of Amazon was wrong. I think that I have somewhat underestimated their ability to get it done in a very tough consumer environment.
With the out-of-whack P/E and investors seeking the shelter of stability, I don’t see this making a run to $120 or even $100. But at the same time– without a catastrophic catalyst– I don’t see a drop to $50 or even $60.
I think for the time being Amazon is going to be stuck in a range, and for those daytraders out there who pay attention to the intricacies of its intraday movements, there will be the obligatory daily ups and downs of a few bucks that can be played. But for the investing crowd, I see this languishing mostly in place until the economy improves and the stock goes up, or the economy doesn’t and Amazon eventually misses estimates and goes down.
Either way, the pending results will be telegraphed… the macroeconomic indicators will show improvement before Amazon makes any real move, so there will be plenty of time to get in. In the mean time, I am on the sidelines in this one, except if time permits for the occasional day trade.
Disclosure: As of publication I am have no position in the stocks mentioned here, but positions can change at any time. I am not a professional, but I am trying this at home. It is highly recommended that you consult a licensed financial advisor or broker before making any and all investment decisions.
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