Amazon Stock Poised For Fresh Highs, Says Bull Signal

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The shares of (AMZN) are rebounding, nearly overcoming the $3,270 mark earlier for the first time since May 26. The security has struggled on the charts after nabbing an April 30 all-time high of $3,554, and is now contending with its year-to-date breakeven level. This recent pullback isn’t something to lose sleep over, however, as data from Schaeffer’s Senior Quantitative Analyst Rocky White suggests a bullish signal could be flashing for the tech titan. 

More specifically, the equity is trading within one standard deviation of its 52-week moving average, after spending several months above this trendline. Shares have tested this trendline at least 15 times over the past 15 years, resulting in an average 13.4% three-month gain in 93% of those instances. At AMZN’s current trading price, a similar pop would put the security at a new record above the $3,692 mark by September.

Analysts have been bullish, too, with all 35 brokerage firms in coverage calling AMZN a “buy” or better. Plus, the stock’s 12-month consensus target price of $4,239.43 is a loft 30.5% premium to current levels.

Drilling down to today’s options activity, 164,000 calls have already crossed the tape, which is nearly double what is typically seen at this point. The weekly 6/11 3,300-strike call is the most popular, followed by the 3,250-strike call from the same series, with new positions being opened at both.

Lastly, these options are reasonably priced at the moment, per the stock’s Schaeffer’s Volatility Index (SVI) of 21%, which stands higher than just 2% of all other readings in its annual range. This implies options players are pricing in extremely low volatility expectations – a boon for premium buyers.