NEW DIRECTIONAL CALL PLAYS

Amazon.com Inc. - AMZN - close: 182.14 change: -0.45

Stop Loss: 176.45
Target(s): 189.50, 199.00
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes

Company Description

Why We Like It:
On a side note AMZN just announced that its third-generation Kindle e-reader is the company's bestselling product ever! Overall company sales should be impressive. At the peak of the holiday shopping season AMZN said customers were ordering a 158 items every second. The stock's rise off its August lows would certainly suggest strong sales and stronger consumer have already been priced into this stock. However, I still think there are new highs ahead. Broken resistance near $180 should be support so this dip to $180.45 today looks like a new entry point.

We do want to keep our position size small. AMZN can be a volatile stock. I'm going to try and limit our risk with a relatively tight stop loss at $176.45. Under support at $180 should be another level of support at $177.00. Our upside targets are $189.50 and $199.00.

Open Small Position Now!

- Suggested Positions -

Buy the 2011 January $190 calls (AMZN1122A190) current ask $2.33

- or -

Buy the 2011 February $200 calls (AMZN1119B200) current ask $3.85

Annotated Chart:

Entry on December 28th at $xxx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume = 5.0 million
Listed on December 27th, 2010