Amazon (AMZN) – AMZN had a relatively flat 2021 compared to the overall market as it gained just +2.25% for the year. Most of this was after tough year over year comps from the monster 2020 year it had during the height of the pandemic. Moving into the new year, AMZN has some positive seasonality in January with 7 of the last 10 years higher this month for an average return of +6.2%. The stock has been a good candidate for selling bull put spreads into declines to support however throughout most of the last year. Generally these pullbacks to its rising 200 day EMA have coincided with solid multi week rallies within its longer term consolidation building on the weekly chart. AMZN is a name that has become more of a lower beta safety stock as it matures similar to other FAANG mega cap stocks. This recent dip in the stock comes right back into the 2021 VPOC at 3315 and presents a nice opportunity to sell credit spreads in February, giving enough time for the stock to recover to hold above the 3300 zone of support. A bounce back to 3515 would be the retest of yearly value high and a close back over that would potentially bring a rally up towards the November high at 3750. Long term the weekly and monthly charts of AMZN point to continuation of the bull trend above 4000. Options action has seen some new fresh bullish positioning with a massive buy on 12/31 of 5100 January $3250 ITM calls at $133.22 for $65M in premium. Also an opening put seller of over 1400 of the June 2023 $3350 puts for $65.3M and a large buy of the June 2023 $3900 calls for $61M.

Trade to consider: Sell AMZN February 3260/3240 put spread for $7.50 credit or better