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Trade Alert: Taking some profits on Amazon

April 19, 2016 by Cody Willard

It wouldn’t shock me to see the markets pull back 2-3% or so here, if only to re-embolden the shorts but not quite give the underinvested longs a chance to get long. Then we rally right on into new all-time highs in the $DJIA and $SPX? Or, another thought — whatever happened to sideways market action? Maybe a long churn around these levels to exhaust both longs and shorts is in the cards? I use question marks at the end of those prior two sentences because I just don’t think there’s an easy read to the path of least resistance for this stock market for the near-term here.

I’ve been preaching sitting-on-our-hands and letting our longs do the work for us for the last few weeks and it’s been a very good strategy as many of our largest positions have been in big-time rally mode. I’m certainly not bailing on our Revolution Investments and I’m still not terribly bearish. But doing a little more trimming now and raising a little more cash gives us even more flexibility to navigate any near-term swings in the market.

So I’m going a little trimming of some of at least one of our longs that have been straight up for the last few weeks. I’m going to sell about 10% of my Amazon long. The stock is up $150 or almost 30% since it bottomed on February 9th, and even after this trim, it will be a pretty big position in my personal portfolio, but I’m going to just take a little bit off of each here now.

While I think they Amazon will head much higher in the next decade, I’m less sure it will head higher in the very near-term after its huge move ups recently. Recall that I’d actually bought call options in Amazon and a few other names back on February 8th sending out this Trade Alert, within a day of these stocks bottoming before they rallied through the roof:

Those are the types of pitches we are looking for and you can be sure that I will be on here sending out Trade Alerts when it’s time to swing our bats again.

Let’s talk some Netflix.

$NFLX down 10% on this: The company guided for 2 million net member additions in international markets in Q2. This figure was more than a million lower than most analysts’ estimates — and lower than any quarter’s international net additions in 2015. In the grand scheme of things, that adding 2 million or adding 3 million international subscribers in the next 90 days isn’t why I own this company.

Netflix CEO Reed Hastings repeated his commentary that Internet TV was the future.

$LVLT, $SNE, $GOOG, $AAPL and Amazon are some other Internet TV plays that come to mind as plays on the Internet Video concept, which is something I first started writing about and investing for more than a decade ago.

Back in 2006, in an article called “Buy into the Internet Video Revolution while you still can” in the Financial Times, I wrote: “The internet video revolution is a growth business. Ignore the shortsighted player haters and buy in while it’s still early.”

 

And finally, listen to the latest Cody Underground Podcast in which I talk #VirtualReality #VRRevolution #VR with @faminvestor. Lots of details about how I look to invest in Tech Revolutions too.

 

 

 

 

 

 

Related posts:

Trade Alert: TXN pops, semi's look ready to drop (and a change to my TV schedule)
Trade Alert: Prepare For Better Times
Trade Alert: Taking some put profits as the markets hissy fit about the Fed
Trade Alert: Solar Edge profits, Verizon nibble
How Apple got to my $1000 per share target (and Trade Alert: Solar profits)
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Filed Under: Trade Alert

Disclosure: At the time of publication, the firm in which Willard is a partner and/or Mr. Willard had positions in some of the stocks mentioned above although positions can change at any time and without notice.

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This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or cryptocurrency or token any other product or service by Cody Willard or any other third party. Furthermore, nothing in this is intended to provide tax, legal, or investment advice and nothing in this should be construed as a recommendation to buy, sell, or hold any investment or security or cryptocurrency or token or to engage in any investment strategy or transaction. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.

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