Putting my reputation on the line for AMZN!!!

Discussion in 'Stocks' started by michaelscott, Jul 21, 2007.

Will Amazon pop or drop after it reports earnings?

  1. Pop

    4 vote(s)
  2. Drop

    6 vote(s)
  1. Amazon reports soon and my belief is that it will pop after earnings. Its going to be a fun time!!! I know all you guys just want to short Amazon, but somehow I feel the good ole year 2000 stocks are back.

    Bubbled up value stocks like Caterpillar are going to come crashing down and the last one standing will be Amazon!!!
  2. So uh, what's your rationale for it popping?

    Just gambling?

    And btw, you have no reputation.
  3. My thoughts EXACTLY!!!
  4. 1) General market conditions- Nasdaq-100 index is flying higher. Its a growth index and growth is favored in the late stages of the business cycle. Amazon is a growth stock in the Nasdaq-100 growth index. While the SPX has been dancing uncertain up and down, left and right, the NDX has been the place to be without question.


    2) Amazon specific conditions- Circuit City, Tweeter (now bankrupt on the pinks), Best Buy, Sears Holdings, Radioshack, etc etc. All these retail outlets are having trouble. Read through their quarterly reports. The consumer is having trouble. Consumers still have to buy goods and when price counts then you turn to the web. Who wants to get ripped off on ebay when they can go to amazon?

    3) China/Foreign play- Amazon is setup to take advantage of the online industry in foreign countries. They have the experience, knowledge and resources. They are perfectly aligned.

    4) Technicals- Amazon has been consolidating for years and is now over a key price. I believe that on the technical chart the capacity exists to where the price can double from here.

    5) Float considerations- Most of the float belongs to only a few shareholders who will not sell. Bill Miller at Legg Mason will not sell the Amazon shares.

    6) Cramer and other media pumping AMZN- While some may laugh at this, whenever Cramer and the media start getting behind certain stocks, then they continue to grind higher as more attention gets placed around them. Most of the float is held by institutions like Legg and so retail investors end up wrestling for whatever is left. Cramer will continue to mention Amazon and his Thestreet.com will pump it.

    7) Where is the drop?- Everyone has been talking about Amazon dropping and it has had 4 months to do so. Why hasnt it dropped yet? Is everyone still covering their shorts months later? Maybe the answer is that big money is throwing a floor udnerneath the price...

    8) Valuation/PE- We have to face the fact that some stocks naturally trade at a very high P/E. Look at First Solar, look at JSDA, look at FTEK. All of these stocks seem to grind higher and higher reaching amazing levels with P/Es that seem like they are from the tech bubble. If investors are comfortable at these levels, then they are comfortable. Even though the P/E and valuation seem spooky, no one is selling their shares.

    9) Price peaked at 74.72 at start of June, then dipped to 66.71 and then made a right peak at 75.35. This formed a cup like formation. After 75.35, price pulled back to 70.50 for a nearly perfect 50% retracement. Price pivoted off of the 20 day moving average and now resides perfectly in the upper bollinger band. This is highly bullish.

    10) Internet retailers are doing better now then in at any point since year 2000. They seem to be back in fashion. Even OSTK, the biggest dog online retailer of them all, has squeezed out a 33% ytd return and its downtrend has stopped. One good example is Blue Nile which has more then doubled from the start of the year. There is definately P/E expansion in the online retail industry.

    11) Lots of bearish sentiment and doubt about Amazon exhibited on Elitetrader, always a contrarian signal.

    Right now we are at a key price point. If this goes above 75, then I will have confidence it will go to 85 and then advance to 100 from there. Cramer has named Amazon as one of his leading stocks and so the retail crowd will be wrestling for shares along with the shorts and the institutions.

    Bill Miller buys stocks as they go up and has surely acquired even more. He will not sell until the price of Amazon recedes. . .

    If you press me for a price point, then I would say Amazon makes it to 100 in the long term, short term target is $85.
  5. bill miller is a baseball player

    i'm sure if anyone is an expert he is

    I will go long on some amzn b4 earnings though