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Two Ways To Play: Amazon Gets Downgraded

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Strengthen your portfolio in good times and bad.

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Amazon Downgraded

Needham & Company downgraded Amazon (AMZN) from Buy to Hold.

In a story by Barron's, the firm said that although it believes the online retailer is one of the premier US companies and should be a core holding in investor's portfolios, it thinks the stock is getting ahead of itself.

Needham says the current price now implies a long-term revenue growth that will be increasingly difficult to achieve. Its valuation model assumes an annual revenue growth rate at 25% for 10 years while maintaining a 25% margin. Using this assumption, it translates at a price target of $120.

From the Bull Pen: In retail, bulls can look to Kroger (KR). The stock is approaching $22.40, the 50-DMA and a level where it broke out last month. Sell stops can be set below that mark.

From the Bear Cave: Regarding Amazon, shorting stocks that are trading near their all-time highs is a very risky strategy. Instead, J.C. Penney (JCP) might be one stock to consider. Those playing the downside can set a buy stop near $30.50-31.

A Quick Check around the World

Asian trading closed with the Nikkei -1.32%, India -1.25%, Hang Seng -0.86%, Shanghai 0.53%, and Taiwan -0.09%.

Across the pond, we see the FTSE -0.60%, CAC -0.99%, DAX -0.87%

As of 8:30 AM EST, S&P Futures are trading -9.00 to 1099.00. Nasdaq futures are -12.25 to 1788.00.

A Look at Commodities

Over in commodities, crude oil is -0.59 to 78.99 while gold is -4.300 to 1136.90 this morning. Silver is -0.14 to 1827.0 and copper -1.500 to 309.55.

The dollar Index is +0.2750 to 75.5400.

On the Radar

Economics

08:30 Initial Claims
08:30 Continuing Claims
10:00 Leading Indicators 0.4% cons.
10:00 Philadelphia Fed 10.8 cons.

Click here for the full trading radar.

Good luck today!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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