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With Sales Story Over, Will Amazon Have Happy Ending?


Institutions looking to put cash to work in 2010 may pile in.

Asian stocks rose overnight, but only a smidge. The Hang Seng and the Nikkei were up 0.09% and 0.04%, respectively. European stocks were in positive territory early this morning, too. And here in the US, we're currently trading higher.

Here's what I'm seeing:

Shares of the book retailer were a good read in yesterday's session. Its stock ended up nearly a buck and was in the spotlight on an otherwise low-volume day. The reason for the run: upbeat news about its holiday orders and comments about strong Kindle sales on Christmas.

Some thoughts:

In early December, I wrote in Four Reasons to Read Amazon as Opportunity that a pullback at that time would prove to be a decent trading opportunity. It turns out I was right (which, contrary to what my wife says, does happen on occasion). But I feel the same reluctance I did back then about jumping in full-force.

2. Part of me thinks this is/was the holiday pop I was expecting, and that with the sales news now in the rear-view mirror, some of the air may come out of this balloon.

3. Why is management seemingly so secretive with Kindle data? Then again, maybe it's a wise move to counteract folks (like me) hanging on every sales data point as happens with Apple (AAPL) and the iPhone.

With the stock performing and near its highs, will any of this matter? Institutions looking to put cash to work in 2010 may pile in.

5. Look for a little goose this morning courtesy of Kaufman and Piper.

International Business Machines
Big Blue was among the winners in yesterday's session, too -- I assume because of the upbeat Barron's article.

My feel:

1. As you can see from a past article, I've been excited about this stock for a while, and nothing's changed.

2. The shares could continue to gain ground in 2010. Right now we're at about 13.4 times the 2009 estimate, which I think is pretty sweet.

3. There could be some upside to the fourth-quarter estimate. If I'm right, the shares could get a nice goose.

Keep in mind, though, if this market does give back some of its gains, IBM could go along for the ride, despite these positives.
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No positions in stocks mentioned.

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