Hello!
You guys may remember me from the past as one of the longtime Amazon bulls. Well, I stated then that I would join the bears when the time came. I don't think the time has come yet. Here's why:
TECHNICALS:
- The triple top /head-and-shoulders formation you guys keep mentioning looks more like a trading range / base building formation to me. If you turn the chart over, it looks almost exactly the same. (triple bottom / head-and-shoulders bottom)
- This is the big one: Money has been flowing INTO the stock on both Thursday and Friday. Strange, but true. Take a look at 'money flow' on the TA charts. This really surprised me, as I expected this indicator to confirm a downside break. (what I was looking for). The pros have been taking this opportunity to load-up. In fact, Friday's money flow was the best it's been all week!
- This stock has been one of the TOP performing stocks in the correction. It's Relative strength and OBV have been increasing during this trading range. Amazing... In fact, the shorters would have been MUCH better off shorting a random Nasdaq stock over the last month than this one. It cracks me up that the bears pat themselves on the back for 'picking this one', when in fact they could have been made rich by exploiting other opportunities. Now they are talking about taking short positions after most Nasdaq stocks are down over 50%. Makes me smile...
- Frankly, the quality of the shorters in this stock doesn't impress me. Most seem like first time shorters, whipsawing all over the place. The pro shorters have largely stayed away from this stock. The amateur's reasons for shorting are all wrong, and it just gets built up more and more by the behaviour on these threads. The bragging over a 12K short term gain made me laugh, because I know it will be gone on the next trade. I don't want to be betting with this group, no way...
- Too little float, too much institutional sponsorship, too many shares short.
FUNDAMENTALS:
As I've stated in the past, the bears do not understand this company. Not one bit. Let me explain:
- Amazon.com is NOT about books. It's about 'real estate'. WEB real-estate. Fact is, More people come to this site than any other e-commerce site by a longshot. This is a huge, largely captive audience. As Amazon offers more items, it will serve as a one-stop shop for everything, saving users money, time, and shipping costs.
- Contrary to popular belief, THERE ARE HUGE BARRIERS TO ENTRY. Here is why: At this point in the internet game, no company can come on-board, and grab 50% WEB marketshare. Impossible. The real estate has been 'bought-up'. Explains Barnes-and-Noble.com relative failure. Amazon has this real-estate occupied. In other words, anyone can setup a web site, but how can you get people to come to the site? If it will take AMZN 1 billion in revs to turn a profit, how can ANY OTHER e-commerce site expect to turn a profit? There is no advertising space left. The barriers get larger and larger as more time passes. The first is the winner. Amazon will be the first to turn a profit, then they will turn the screws BIGTIME on the rest.
- Huge cash reserves, rapidly increasing revenues (still!)
- Good luck! This still looks like the next Dell to me.
kp |
