The Fed will act to mitigate inflation with tapering and rate hikes: the timing and methods will affect the markets. We see 10y Treasury yields gradually rise towards 2% and even more. We will likely have a volatile first quarter.
Amazon.com [AMZN.N], closed on Friday with a -6% at $2,852, in Pre-Market it is flat. The stock is part of a very long-term uptrend, which actually started right from the listing. However, prices have been consolidating since July 2020, despite having repeatedly hit marginal new records. The graphical picture both in absolute and relative terms suggests the continuation of the status quo, that is, with price fluctuations within the $2,880 / $2,870 – $3,500 / $3,773 range. For a few weeks, the short-term trend has been downward and should point to the lower part of the aforementioned range. Signs of strong deterioration only below $2,880 / $2,870. We shorted the stock on January 6, 2022 and our target was fully captured. The Nasdaq now has major support in the 14,500 / 14,000 point range, where it currently pushes the index. There could therefore be at least a momentary rebound. Even the stock is now very strongly oversold, which should favor a rebound but which does not change the short-term bearish trend. You can close the short to take home the profits, waiting to reopen the short at higher prices, towards $3,100 / $3,000.
We recommend going SHORT on the stock only on rebounds towards $3,100, buying Leverage Shares Amazon ETP with -1x leverage, ISIN IE00BKT66S86, for short term target towards $2,700. Alert / stop loss above $2,900 (closing price).
