Amazon Up Big On Heavy Volume Before Earnings

October 23, 2007 at 12:16 pm  ·  Category: Sentiment Analysis, Stocks

Amazon is up almost $7, more than 7%, on huge volume before it reports earnings after the close today (AMZN 10 Day Chart).

Investors seem cheered by good reports from Apple and Google and are expecting more of the same from Amazon.

But Amazon looks mighty expensive up here, trading for more than 60 times analysts estimates for 2008 earnings.

TheStreet.com’s Vishesh Kumar titled his preview of Amazon’s earnings “Amazon Must Blow the Doors Off” and at this valuation and with this move leading into earnings, I’d tend to agree.

UPDATE (Tue 10/23, 12:50pm PST): The options are showing massive speculation on Amazon’s earnings report.

For the next 3 months (November, December, January) approximately 155,000 calls have traded hands today compared with about 92,000 puts.  That gives us a put/call ratio of .6 meaning 5 calls are being bought for every 3 puts being bought.

That compares with about 312,000 outstanding puts and 278,000 outstanding calls for the front 3 months going into today’s trading for a put/call ratio of about 1.12.

What this shows is the contrast in bullishness between today and everything leading into today.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
 

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