I am considering the recent low in AMZN ($397, up $3.37) to be key and pivotal. If price can continue to hold above here, my charts show the initial upside target at the 410.31 area. There is a hurdle that price NEEDS to clear however. That zone is what we are currently stuck at at $398.65 – $399.06. This is the coincidence of a .618 retracement along with a 100% projection of a prior swing. My bias is that we will clear this zone eventually. Target $410.31 …probably within a couple weeks…and I’m wrong if we take out the recent low…….
So what options strategy should we consider? First, lets decide on which expiration. Regular Jan expiration is 10 days from now, which might not allow us enough time. AMZN has Extended Weekly’s, I’m leaning towards Friday Jan 24th (Jan 31 might be too much time to pay for). How about a vertical spread? Looks like the Jan 24th 400 – 410 call spread would be going for ~$3.75 if we break through $399. The 410 call over $3 is at a nice premium with 17 days until expiration.