Diving Into Amazon

I love the product but hate the stock. That sums about my sentiment for Amazon (AMZN). I know several people who agree. Still, I can't ignore the breakout the stock is looking to make today above $285. We already have seen a bullish cross on the 13- and 34-day simple moving averages along with strong momentum as demonstrated by the stochastics and relative strength index.

Amazon (AMZN) -- Daily Source: StockCharts.com View Chart » View in New Window »

I won't play the actual stock, as the risk is a bit too great for me. If I wanted to buy the stock, I would simply use in-the-money calls with a high delta. In this case though, I am going with a very aggressive play in the weekly $285-$290 call spread for about a dime under $2. This will be a small play, but the week of the Fourth of July holiday tends to be bullish. AMZN feels destined now for $300, so I have also added some July 19 $285-$300 call spreads for just under $5. I am a little hesitant not to be further in-the-money in an attempt to limit time decay, but I want to keep my risk capital at a minimum....182 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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