Amazon.com, Inc. (AMZN) PriceWatch Alert for August 27, 2008
Posted on Wednesday, August 27, 2008 8:07 AM
Amazon.com, Inc. (NasdaqNM: AMZN) closed yesterday at $81.76. So far the stock has hit a 52-week low of $61.20 and 52-week high of $101.09. Amazon stock has been showing support around 80.17 and resistance in the 83.91 range. Technical indicators for the stock are Bullish and S&P gives AMZN a neutral 3 STAR (out of 5) hold rating. AMZN appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at an Oct '08 85 covered call (ZQN JQ) for a net debit in the $77.41 area. That is also the break even stock price for this trade. This covered call has a 52 day duration, provides 5.32% downside protection and a 9.80% assigned return rate for a 68.82% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the AMZN Jan '10 40 Call (WEW AH) and selling the Oct '08 85 call (ZQN JQ) for a $41.80 debit. The trade has a 52 day life and would provide no downside protection and a 7.66% assigned return rate for a 54.00% annualized return rate (for comparison purposes only). Amazon does not pay dividends at this time. [For more information on these strategies along with more details on possible risks go to
www.iotogo.com/HPWAinfo]