Monday, October 25, 2010

Prepare for the Rally...long tech!

As futures point to a higher open today, it seems like once should continue to invest names that have been working. The tech sector has shown amazing strength and in situations where the QQQQ's are up significantly pre-mkt, how can I resist purchasing a tech-leader at the open. I actually like AMZN. The Company reported last Friday and despite the choppy action in the market, the stock closed higher on the back of some pretty amazing growth. What should we look at? I think there's a few different ways to get into this name. The way I'd like to play this would be to purchase upside calls on the weeklies expiring this week. Take a look at the $175 strike calls trading at just around $1. If the stock was to open at or near this, we could purchase 10 contracts for just $1k giving us upside on the stock above $176 at expiration. We probably don't even need to wait that long. If the market pushes higher today and the stock closes in the 173-174 range, I don't see any reason why these calls would not double.

1 comment:

  1. Just 30 mins after I posted this recommendation, AMZN price target just got raised to $195 by UBS! This could provide some positive momentum to the stock today.

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