I just purchased AMZN at $1245.12 per share. AMZN has been on my watch list for quite a while based on subjective observations. For example, it seems that any retail purchase I make these days involves a search on Amazon.com to make sure that I am getting a fair price if I choose to buy in a brick and mortar location. But increasingly, I just end up buying from Amazon. But this is only one dimension of this multi-faceted company. Discussion of all of Amazon’s business segments is beyond the scope of this blog entry. Suffice it to say, that more and more, AMZN has become the 800 pound guerilla in the room, and I wanted a piece of it.
Back on July 21, AMZN closed at a new high on a weekly chart. Then, over a twelve week period, it pulled back gradually and then started advancing again forming a fairly smooth trough shape. Then for the week ending October 27, it broke above the previous high closing at $1100.95 on almost twice the normal volume. This should have been my buy signal. But for many reasons, I didn’t get in. Two of those reasons were based on middling ratings by paid services that I tend to use (Morningstar and Zacks). The only real positive objective signs I could point to were annual increases in revenue, earnings, and earnings per share. But I still had a gut feeling that I wanted to be a part of Amazon.
The following four weekly closes were higher, but on decreasing volume, ending in a new weekly high of $1186 on 11/24/17. After that came five weeks of a slight pull back. Then for the week ending 1/5/17, another break above the new all time weekly high closing at $1229.14. Even though the volume was a little less than average, I took this as a second chance buy signal, and bought a position in AMZN today at the previously mentioned price of $1245.14. If I had purchased the shares at the opening on the day following the original buy signal, I would have gotten in at just under $1100. Therefore, I would have a unrealized gain of about 13% at this point. Nevertheless, I am happy to be a participant in Amazon’s performance from this point on. Just in case things don’t go my way, I am setting a stop loss order at $1110.97 which is 3.5 ATR (Average True Range) below the closing price today (based on weekly ATR), and will be trailing that stop should the shares continue their advance.
Here’s a link to view a chart of AMZN as of this date: