Amazon is looking tasty here

Back in late August I posted on Amazon, pointing out that it looked like a big move was coming.  You can click [here] to revisit the post, but below is what the chart looked like back then.

And here is how Amazon looks today - what a difference a month makes, huh? (both charts are clickable)

Talk about a parabolic move - that's almost straight up, and a 28% gain in less than 4 weeks!  Well friends and neighbors, nothing goes straight up forever, and while price seems to be consolidating between 155 and 160, I think this is a great spot to get into a trade to the short side, with a tight stop, should this move up not be complete.  I didn't show it on this chart, but the RSI and Stochastic have both shown over bought for weeks and are now descending, and the MACD also looks to be rolling over from an extreme high (all on the daily chart).

I will be watching price action in the morning to gauge my entry - ideally we will open somewhere within this current range, and I would want to make my entry as close to 160 as possible.  November 160 and/or 150 puts (the monthly options) are the play.  Stop loss would be if the stock trades to 165....small risk.  If you want to tighten risk further, you can buy the 170 or 180 puts.  The options will be more expensive, but the delta is higher and you won't lose as much if we stop out.  Amazon moves fast in both directions when it gets going - the past four weeks are evidence of that - so if we do start selling off, my first target would be 145 to take profits on at least 50% of the position. 

If we start the day with a gap-up over 160, or a gap-down below 155, I will likely scratch the play and re-evaluate...all depends on how things go after the open.