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$AMZN - Amazon is "OUT OF RALLY TIME" using Time@Mode

Amazon has rallied for 15 weeks into last week's close after accumulating at the mode back this past fall for 15 weeks. In other words: Amazon has "run out of time".

Once Amazon blasted off on its previous earnings report back in October, it kicked off a 15 week rally which ran far beyond the rally that was implied by the previous move from $766 (where it lingered for 17 weeks in 2016 and had a 22 week rally out of that accumulation). A move from $766 to $980 was 29% and the implied rally from $980 was also 29%, but it ran up over 50% (see chart).

Now that $AMZN has reached $1498, the PSR reached 4 times (an extreme reading) while the free cash flow yield has fallen to 1%, which means that the $7 billion in free cash flow is only 1% of the $700 billion in market cap for Amazon. Growth over the coming decade will help drive up that yield, but right now that is the return you would earn if you took Amazon private.

Using the Time@Mode methodology, together with Key Earnings Levels stemming from quarterly earnings reports and raw and relative valuation analysis, we can see here that Amazon has "RUN OUT OF TIME" on a weekly basis for this rally and would only expect it to move sideways to down over the upcoming 15 week time frame as a new level of consolidation builds as the fundamentals "catch up".

For now: It is opportunistic to sell short $AMZN with 5%-10% downside targets. Cover and re-short on 75% rebounds as many times as possible for the next 14 weeks.

12:41PM EST February 7, 2018 $1439 last $AMZN
Bình luận: This is already a "first target" reached in just one day, down $90 from this publication, which is between 5%-10%.

The extreme selloff into the close may lead to a small gap down tomorrow, but a good idea to cover and try again back up 75% retracement of this decline.

The reason for the bounce? Put buyers are paying up BIG to hedge positions now versus last week the cost was low relative to betting on the upside in Amazon. So, I view selloff's as short-lived here.

Tim 10:12PM EST Feb 8th, 2018 $1350.50 last (down from $1440 publication)
Bình luận:

$1309 last.

Right along the path I outlined.

Quick bounce this morning and back down again.

Feb 9, 2018 12:01PM EST
Bình luận:

Big bounce from the low so far after a 12% decline from the sell signal. Look for 50%-75% retracements to sell short again.
Bình luận: It looks like we are nearing the end of this rebound from oversold and a new short position can be taken above $1400 with a $1480 stop loss. Short up to the lowest risk short level of $1440 where I would suggest putting on the largest portion of your short position. Downside target $80-$120 points within 5-8 days.

Tim 12:51AM EST 2/13/2018
Bình luận:

The yearly time frame expired last year.
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Hi @timwest , Any plans to update this chart?
I am really curious how you see this uptrend continuation, and how T@M plays out here.
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timwest ZoltanBalogh
@ZoltanBalogh, Thanks for asking. Once a market gets beyond the patterns implied by the T@M method I leave them alone and search for other setups. Otherwise, trade on shorter and shorter time frames to find the pattern. The market is telling you what time frame it is on by the time frame where there are 10 periods in the mode (not more than 20, but ideally 10). Let's take a look...
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timwest ZoltanBalogh
@ZoltanBalogh, You can see there is no "Mode" to work with on the quarterly time frame that supports the price up here. So it is essentially a strong trending stock that isn't operating on the long term (quarterly) time frame. I'll look at yearly next.
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timwest ZoltanBalogh
@ZoltanBalogh, The yearly time frame was controlling $AMZN up through last year, but now that time has expired. There's no reason it has to stop trending, but the method encourages you to bank positions after time has expired. You can use a trailing stop under the previous bar low (in the case, last year's low). You can use any 'trailing stop' method you want, but the concept is to exit 1/2 position when time expires, 1/2 position when price targets are met, but if you don't have any other ideas, use a trailing stop on a smaller portion of your position.
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Sooo your SL 1480 touched?
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Tim, Thank you for helping hopefully many people to not make a costly mistake. Very appreciated!
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Good job and will help. Thank you for the analysis
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timwest michaelgoldin