How To Trade Amazon Stock Today

The timing is perfect on this trade…

At midnight on June 24, Amazon.com Inc. (Nasdaq: AMZN) closed the books on another 48-hour Prime Day "shopping holiday."

Amazon's $9.9 billion haul in 2020 wasn't bad, but analysts expect 2021 receipts to top $11.7 billion, as more than 150 million Prime customers hit "Add to Cart" on hundreds of thousands of specially marked items.

$11 billion… 150 million customers – numbers like that have to move the needle, right?

Amazon pickup & returns building
Image Source: Unsplash

Well, not quite. Those numbers will move the needle, but it'll move in a direction a lot of folks aren't expecting, and I'll show you why.

Right now, the single smartest, most profitable thing you can do is "fade" Amazon's rally, as we used to say on Wall Street.

To do that, there's an "asymmetrical" low-risk/high-reward trade to make.

It's far cheaper and a lot easier than you might think, and I'll walk you through it.

The only catch, if you can call it that, is that you have to move quickly…

Here's Why You Should Bet Against Rallies Like This

There's an old Wall Street saying – "buy the rumor, sell the news." Unlike a lot of things on the Street, this actually makes a lot of sense, and it can easily work in your favor. It's a cliché for a good reason, and it's nearly universal.

In anticipation of some "event," be it an earnings report, a product launch, executive shakeup, a regulatory approval – whatever – traders bid the price of a stock up and up in anticipation of cashing in. Then when the event actually happens, those traders take that cash and run, sending the stock lower. They buy the rumor, they sell the news. Rinse and repeat.

Amazon's no different. Last year, Prime Day began on Oct. 13 – a day that capped an impressive 13%, one-week rise for what was at the time a $1.5 trillion company.

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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