Fears of a more aggressive Fed on monetary policy have grown since reading the minutes of the December 14-15 meeting, which show that there is open talk of a rate hike « sooner and faster » than expected within the US central bank to combat galloping inflation and favour a more balanced and long-lived economic recovery. This scenario mainly disadvantages the tech / growth sectors. Yesterday, the Treasury yield missed the 1.78% break, which could trigger a rebound for tech if it falls. But we believe this resistance is set to be broken in the short term and this should bring back tech volatility
Amazon.com [AMZN.N], now at $3,245 (+0.5%) in pre-trading, is part of a very long-term uptrend, which actually started since its 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 $2,900/$3,000 – $3,500/$3,800 band. The short-term trend has been downward for a few weeks. There are signs of deterioration below $2,870. Yesterday’s hammer should show some rebound if confirmed at the close today (i.e. with a higher close than yesterday), but it might not change the current bearish trend.
We recommend going SHORT on the stock and above all on any ideas towards $3,500/$3,600 by buying the Leverage Shares Amazon -1x ETP (ISIN: IE00BKT66S86), with a short-term target towards for short term target towards $3,200/$3,100 and later at $3,000/$2,900. Alert/stop loss should be above $3,800 (closing daily).