AMZN: Happiest New Year Trade

Published Jan 2, 2021

Hi everyone and welcome to the Yellow Tunnel community, an aggressive short-term trading service dedicated to all classes of traders seeking to elevate their trading skills, market awareness and trading profits.

Sometimes just because the calendar tuns over to a new year, there are implications that all different sorts of developments will take shape to influence the stock market in both a positive and negative way. From what is known and unknown heading into 2021, I would venture to say that traders should expect more of the same.

When I mean more of the same, it translates to the Fed all but guaranteeing to let the market endure any kind of material decline, Congress spending hundreds of billions more dollars on pandemic and infrastructure stimulus, the dollar depreciating further, bond yields ticking higher, commodity prices increasing, gold and bitcoin continuing their rally and emerging markets leading a global reflation trade.

Collectively, this is a very bullish backdrop for the trading environment and if we do see the market react negatively from the Georgia election runoff, it will in my view, only create a very attractive buying opportunity that would be a welcome consolidation of the heady market gains realized in the past two months.

NEW WEEKLY POWER TRADER SERVICE

We recently launched our new Weekly Power Trader service that we at Yellow Tunnel are very excited about. Each week on Sunday, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.

Also, note that the Weekly Power Trader signals are meant to last for 5-10 days as long as the vector confirms the same direction as the original pick, for stocks we use a target gain of 2% and stop as 2% of the stock price.

Signals have averaged over 75% accuracy in my live trading since inception. Sometimes we hold position 2-5 days by using options (selling OTM BULLISH PUT spread) and targeting 1% target gain and 1% stop loss using stock price. Green color should be interpreted as a bullish signal and Red color as a bearish signal.

CURRENT TRADING LANDSCAPE

You can’t keep a good market down. The SPY continued to make incremental gains. All asset classes rallied into the long holiday weekend except mega cap technology stocks (AAPL, MSFT, AMZN). The SPY $364 level is the key support level short term. The U.S. Dollar and the Treasuries continued to trade in the downtrend.

As long as the SPY is trading above $364 level, the SPY will continue to make incremental gains and can reach $375-$380 level by mid-January 2021. There are some technical signs the bulls are losing some short-term momentum as seen by some rotation out of the hottest growth tech stocks and sizzling IPOs that had captured the fantasy of traders all years.

The market is prone for 5-10% garden variety correction in January-February. At the same time, the bull market will resume its rally and continue to make new highs into March-April. I would be a buyer using any short-term corrections, and use dollar cost averaging strategy to accumulate positions. If you are trading options consider selling premium with March and April expiration dates.

"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $370 level using SPY and "SELL" signal is at $374 for short term traders. Based on our models, the market (SPY) will trade in the range between $350 and $385 for the next 4 weeks.

How To Use Our Signals

Once you become a member, I encourage you to review our Live Trading Room recordings to see how I trade Aggressive Power Trader signals in my account. A snapshot of how we produce our Live Trading Room Sessions shows how we pack in a lot of information which can be accessed from whatever device your driving.

As a reminder, consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our live trading room, I usually hold a position for 1-2 days.

I allocate less than 5% of my portfolio, if the position is being held overnight. On the average, less than 1% of the portfolio should be at risk, if you own a position for less than one day.

I enter a position at predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of stock price. I target 75% accuracy using these signals.

Few subscribers asked about Options trading using the signals provided. Please review live trading room recordings. I often sell OTM credit put spread using weekly options and collect 0.5% using stock price. For example, if stock is trading at $100, I would sell OTM put (strike less than 100) with option BID price close to $0.5.

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SECTOR SPOTLIGHT

If there is going to be a major rebound in domestic GDP, it’s going to be led by consumer spending, which accounts for 68% of GDP. Assuming the vaccine does get to the greatest number of people needing it most first and the logistics ramping up aggressively to inoculate everyone that want to take it, we should see signs of a major uptick in retail sales in the second quarter.

While ecommerce sales have been robust, retail sales data for November came in light of forecast and estimates of the holiday shopping season are modest due to the surge in Covid data that kept people from many consumer related activities, entertainment, travel and brick and mortar shopping. That’s all going to change in about three months and the market looks out three-to-six months in pricing stocks.

The easiest way to play the great consumer comeback trade is to own the Consumer Discretionary Select Sector SPDR ETF (XLY) as a way to cast a net over America’s leading retailers. The top 10 stocks make up over 65% of total assets and provide exposure to general merchandise, home improvement, apparel, fast food, travel and auto sales.

The three-month chart of XLY shows a steady and consistent pattern of the shares executing higher-highs after each short period of consolidation. In the very near-term the stock is probably due for a retest of its 20 or 50-day moving average, where we would want to have a trade set up from the long side. As a member of Weekly Power Trader, you’ll be right there to trade this leading and liquid ETF when we do.

TRADE OF THE WEEK

The 800-pound gorilla in the retail space is Amazon.com Inc. (AMZN). With over 112 million Prime members flocking to the site on an almost daily basis, CEO Jeff Bezos and his team have built a global juggernaut that continues to invent itself by disrupting one economic sector after another. The most recent being is rollout of pharmacy distribution with its PillPack that it acquired back in June 2018.

Amazon will see sales climb by an estimated 18% in 2021 to $450 billion and see earnings rise by 31% to $46 per share. It was many years before Amazon showed a profit as the company ploughed its cash back into expanding its platform, but now the company is monetizing its early years of compounding sales at a torrid rate and now trades at a valuation most traders and investors find reasonable if not cheap.

Following a big rally for Amazon shares in early 2020, the stock has built a six-month base that sets up beautifully for a new rally phase that will propel the shares to new all-time highs that should surpass 3,552 reached back in August 2020.

When that upside breakout occurs is anyone’s guess if using traditional technical analysis, but our AI-driven trading platform has the tools to provide exact times to buy and sell stocks and ETFs on a moment’s notice when we get the signals to take action.

One of our tools is the Stock Forecast Toolbox that currently rates Amazon with a Model Grade “B”, which is pretty solid. From the data below, it is forecasting a potential short-term move for AMZN to 3,473 that would represent a gain of 6.6%. Not bad for the next 10 days, but this would only put the stock up against the higher end of its current trading range and not signify a new breakout.

However, trading AMZN for 6% swings using the stock or options can be a lucrative exercise that we at Weekly Power Trader intend to utilize. Using our AI tools is imperative to catching just the right entry and exit points. As the old Allstate insurance slogan used to say “don’t leave home without it”, our slogan for our AI platform should be something like “don’t trade without it”.

Amazon is one of the truly great stocks to trade and should be part of every trader’s watch list when it comes to working the retail sector. Again, don’t miss out when we get busy with this name because there’s a lot of money to be made trading the biggest and arguably the best name that reflects the American consumer.

By being a member of Weekly Power Trader, its these kinds of opportunities that our AI-driven platform provides our members to look forward to every day the put their risk capital to work on both long and short positions.

Our Weekly Power Trader advisory service takes positions in only blue-chip stocks and ETFs that are “green lighted” by my proprietary AI tools, and when confirmed, are added to the portfolio with my investment capital invested in each and every trade.

Trading Thoughts: consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our live trading room. I usually hold a position for 1-2 days and allocate no more than 5% of trading capital to any single trade.

I allocate less than 5% of my portfolio if I hold a position overnight. On average, less than 1% of the portfolio should be at risk if you hold a position less than one day. I personally look to enter a position at predicted LOW (BUY) price or yesterday's close price. For Weekly Power Trader, my stop loss for stocks is 2% and my target gain is 2%.. I target 75% accuracy using these signals.

Through the Weekly Power Trader service, we tie our Tradespoon Live Trading Room to manage the parameters of every trade. And we update our closed positions daily. The two platforms work seamlessly to provide our subscribers with the most robust trading experience available anywhere in the market today.

Just since December 1, we’ve rung the register on 24 straight winning trades, with excellent profits across the board. The beauty of our AI-driven system is that we are always equipped to bring new trades to our members. Trades in best-of-breed stocks and ETFs that are not yet recognized by the larger universe of traders.

We really pride ourselves on this kind of discovery process, to bring trades with very high probability risk/reward parameters to members throughout each week. Our trading system has been on a torrid winning streak since we finished our Thanksgiving leftovers, scoring 27 straight winning trades, many of which are very heady gains.

Speaking of gains, the performance of our Weekly Power Trader service is just incredible. This stellar performance is made possible by being right on 85.60% of all trades with an average profit of 32.42% per trade. Nowhere in the marketplace for trading advisory services is this kind of track record available at any price.

The great news is that we do provide phenomenal performance at a hugely affordable price level. Our AI-driven trading system comes at pennies on the dollar for the returns it generates. Literally, pennies on the dollar.

Once you’ve become a member to any of our service – Weekly Power Trader or Aggressive Power Trader, I highly encourage you to view the instructional videos on how to best use your membership and participate in live weekly strategy roundtable workshops that are also archived in the event that they need to be viewed at a later time.

Traders seeking the most-timely directional trading strategies where 3 of every 4 trades are profitable should take action and come alongside the Yellow Tunnel community and make Weekly Power Trader and Aggressive Power Trader your go-to AI trading platform for no-excuses performance.

Our AI platform crunches all the data, generating a constant stream of trades with the highest probability of generating incredibly profitable returns available to beginning, retail and professional traders anywhere in the marketplace today.

Go to our website at www.yellowtunnel.com and make the Weekly Power Trader service your default trading system where the AI that powers my all-world, always thinking platform and make 2021 a year where you power up your net worth big time!