We have an interesting setup with only 3.65% downside, but with a potential 23.02% upside based on my 'Time at Mode' analysis of this ratio chart. Fundamentals for AMZN are good in the long term, it has been a relatively strong company, and has many interesting future developments ahead (like the introduction of drone delivery of goods, ocean freights from China, to name a few). Many would consider it to be overvalued, but I think it offers a good technical and fundamental setup here, pitted against Alibaba.
The idea is to go long AMZN and short BABA, adjusting the position size based on volatility. I won't delve much into the specifics of position sizing but it's of paramount importance for this type of trade. If we risk 1%, we can make 6.3% in this trade, and it's an intermediate to long term trade.
Good luck if taking it with me. Cheers,
Ivan Labrie.
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Working!
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Excellent progress this week.
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We were close to target recently with amzn's rally...that was a good exit. Now I'm on the fence with this one.