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Two Ways To Play: Amazon Gets Downgraded


Strengthen your portfolio in good times and bad.

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


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!
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No positions in stocks mentioned.

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