{"id":16961,"date":"2012-02-02T08:44:55","date_gmt":"2012-02-02T13:44:55","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=16961"},"modified":"2012-02-02T01:45:18","modified_gmt":"2012-02-02T06:45:18","slug":"the-amzn-trade","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/the-amzn-trade","title":{"rendered":"The AMZN Trade"},"content":{"rendered":"<p>Here is the followup from my earlier post titled &#8220;<a href=\"http:\/\/www.smbtraining.com\/blog\/the-value-added-tweet\">The Value Added Tweet<\/a>&#8220;. I will break down my thoughts in bullet points to move this along so I can try to get some sleep.<\/p>\n<ul>\n<li>AMZN has a history of being bought on large gap downs after earnings. Even if it doesn&#8217;t fill gaps it still is capable of having large intraday up moves<\/li>\n<li>After a stock has a powerful up move on the Open I watch the pullback to try to identify a large buyer. If I can identify a large buyer I am interested to see if the stock will hold higher.<\/li>\n<li>I then watch closely at previously identified S\/R levels<\/li>\n<li>AMZN drove very powerfully from 172 to 176 at 9:45AM. 176 was a key level identified as support in the prior day&#8217;s after hours session and resistance in today&#8217;s pre-market<\/li>\n<li>After the powerful drive AMZN dropped down to 174.50 but never violated the 174.40 level where I first saw a large buyer defend the bid. Bullish<\/li>\n<li>AMZN consolidated for 20 minutes directly below 176 and then broke above on higher volume. Bullish.<\/li>\n<li>AMZN had a very shallow pullback from 177.20 to 176.50. It was now clearly above a key resistance level and not dropping back below. Bullish<\/li>\n<li>This was enough evidence for me to formulate a plan to get long\n<ul>\n<li>As I tweeted here the plan was to buy in the range from 176.50 to 176.30<\/li>\n<li>The trade would be considered a failure if it traded back below 176<\/li>\n<li>The next major resistance was 180 and that is why that target was chosen<\/li>\n<\/ul>\n<\/li>\n<li>This trade idea required no more than 30 cents of risk on the entire position\n<ul>\n<li>Assuming you established the position at the mid point of the buy zone at 176.40<\/li>\n<li>Once AMZN clearly demonstrated it would not trade below 176.30 a sensible trade plan would be to hit out 50% of the position below this level. Assume \u00a0a fill of 176.25. The remainder of the position should be hit out below 176. Assume a fill of 175.95.<\/li>\n<li>The above stop placements would create an expected loss of 30 cents on the entire position<\/li>\n<\/ul>\n<\/li>\n<li>This trade offered about 2.5 points of upside under a normal scaling out strategy\n<ul>\n<li>Assume selling 25% of the position at 178 based on the prior intraday high<\/li>\n<li>Assume selling another 25% of the position on the failure at 179<\/li>\n<li>Assume selling the remaining 50% between 179.90 and the 180 target<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/02\/amzn-feb-1st.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-16964\" title=\"amzn feb 1st\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/02\/amzn-feb-1st.png\" alt=\"\" width=\"600\" height=\"420\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/02\/amzn-feb-1st.png 1000w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/02\/amzn-feb-1st-300x210.png 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><\/p>\n<p><a href=\"http:\/\/twitter.com\/sspencer_smb\"><img decoding=\"async\" src=\"http:\/\/twitter-badges.s3.amazonaws.com\/follow_me-c.png\" alt=\"\" \/><\/a><\/p>\n<p>Steven Spencer is the co-founder of SMB Capital and SMB Training and has traded professionally for over 15 years. His email is sspencer@smbcap.com.<\/p>\n<p>No relevant positions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here is the followup from my earlier post titled &#8220;The Value Added Tweet&#8220;. I will break down my thoughts in bullet points to move this along so I can try to get some sleep. AMZN has a history of being bought on large gap downs after earnings. Even if it doesn&#8217;t fill gaps it still is capable of having large &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/the-amzn-trade\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":143,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,3,15],"tags":[1379],"class_list":["post-16961","post","type-post","status-publish","format-standard","hentry","category-steven_spencer_steves_blogs","category-technical_plays","category-trading_theory","tag-n","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The AMZN Trade | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/the-amzn-trade\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The AMZN Trade | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Here is the followup from my earlier post titled &#8220;The Value Added Tweet&#8220;. I will break down my thoughts in bullet points to move this along so I can try to get some sleep. AMZN has a history of being bought on large gap downs after earnings. Even if it doesn&#8217;t fill gaps it still is capable of having large ... 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