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Amazon Could Sell Off on Smartphone Introduction


The stock is likely to decline in the absence of a blockbuster product.

This article was originally posted on the Buzz & Banter, where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Fast-money traders should put (NASDAQ:AMZN) on their watch lists today.

Amazon is trading up about 1.8% this morning in advance of today's launch event, at which it is widely expected to unveil its first smartphone.

But the bullish action is at least partly coming from shipping giant FedEx (NYSE:FDX), which noted solid demand from e-commerce.

Meanwhile, there are a lot of potential obstacles to a hit Amazon smartphone, like limited app availability and AT&T (NYSE:T) exclusivity.

The broader action in tech isn't particularly encouraging either.

The Nasdaq (INDEXNASDAQ:.IXIC) is slightly negative, and tech subsectors like biotech and social media are failing to impress, so Amazon may not be able to hold its gains in the absence of a blockbuster product.

Remember, the smartphone market is slowing and putting big-time pressure on giants like Samsung (OTCMKTS:SSNLF) and HTC (OTCMKTS:HTCXF). Odds are it's going to take something really big for Amazon to succeed.

I'll issue updates on the Buzz & Banter [subscription required] later this afternoon as the product is rolled out.

The event kicks off at 10:30 a.m. PT, or 1:30 p.m. ET.

Twitter: @MichaelComeau

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