TICKER – AMZN
MY OPINION (JUST MY THOUGHTS, NOT ADVICE) – Amazon stock price seems to be bullish, but range bound.
STRATEGY USED – I sold an Iron Condor, 5 strikes wide, collected $2.44
My AMAZON Stock Projections
The first place I go for stock market research is FINVIZ.com. I looked at AMAZON stock price today and see it conforming to a long-standing range. Amazon stock symbol AMZN chart today is below.
To capitalize on what I believe will be a continuance of this pattern I log in to my Tastyworks account, and decide to sell an Iron Condor. An iron condor is when you sell an out of the money put spread, and an out of the money call spread at the same time. The idea is that the stock will stay in between the short strikes, and you will get to keep the premium you collect.
You can see from the image above I sold the 1950 / 1955 Put spread, and the 2200 / 2205 call spread at the same time. I collected $244. Typically, I try to get at least a 3rd of the strike of the wings, which for a $5 wide iron condor would be $150, so I am getting a little more. This trade is for the October 2018 expiration, so I have 38 days. Time decay is on my side, and I plan to close this position by buying it back for hopefully half of what I sold it for. This is a technique I learned from Tastyworks.
As long as Amazon stock price stays above 1955, and below 2200, this will be 100% winner. But if it does touch, or blow through my strikes, there are ways to manage and even minimize your losses.
The most I will make is the premium I collected, or $244. The most I could lose is the difference between the strikes, less any premium collected, so $500 – $244 = $256.
The nice thing about a Tastyworks account is this transaction only cost me $4 to open, and zero to close. There is no minimum deposit required to open a Tastyworks account, and a margin account only requires $2,000 minimum deposit.
AMZN Stock Technical Analysis – Bollinger Bands
Amazon stock price bounced off the 20-day moving average, and is up about 2.5 % Usually when it stays in the upper band, it continues until it bounces off the top again.
AMZN Stock Technical Analysis – Fibonacci Pivot Points
Going along with the bollinger band, you can see that Amazon stock price formed a base at P, which is 1938.10. This is also a bullish signal, and the next resistance is at R1, 2033.43, and then R2 is a 2092.32.
AMZN Stock Technical Analysis – RSI
After being in an overbought condition, Amazon has recently pulled back, igniting the interest in dip buyers, myself included. Now you can see that the RSI for Amazon stock price is currently at 61.67, which is not considered over bought.
AMZN Stock Technical Analysis – MACD
The Amazon MACD hasn’t confirmed yet, so there may be some sellers out there. But it looks as thought selling pressure is easing for now anyway.
AMZN Stock Technical Analysis – STOCHASTIC
The Stochastic is usually one of the early indicators of direction change, and should be used with caution if you are buying and selling stock shares. Since I am selling stock options, I use this as one of my most dominant ways to try to time the stock market changes.
Iron condors are an excellent way to maximize returns, while limiting your use of capital. If you have any questions about iron condors, Tastyworks, stock options or anything, leave a comment below.