Monday, May 16, 2011, Inc. ends day down $10.05

Just taking a look at some of today's bigger movers. AMZN took a dive today and although I know many are bullish on the name longer term, based on the chart (below) I wouldn't be jumping in with both feet just yet. Looks like it needs some time to consolidate and digest this large move. I like longs closer to $186, although I would say you really have to evaluate the conditions at that time. There is some divergence on the last new price hi, where a new hi in MACD was not registered. As you can see, however, the stock has made strides higher despite this type of divergence in the past.

Options were about twice as active as usual. From looking at the options, it looks like negative deltas were added in both calls and puts, but for very little outlay on a "net" basis. Calls might have been sold to finance put purchases, in which case the outlook from the option market is for AMZN to go lower or stick around here.

I've got a small cheap call fly from a couple of weeks ago that looks a lot better today - $185-$190-$195, but I expect the stock to be active ahead of this week's expiration.

Here's a link to news I saw today on AMZN;

None of this is advice, it's all just my back of the envelope analysis. Take it or leave it :)

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