E-commerce giant Amazon.com, Inc. (NASDAQ:AMZN) is down 0.4% at $3,276.57 at last check. The stock has experienced some volatility over the past 12 months, surging to a July 13, all-time high of $3,773.07, before the $3,170 level captured pullbacks earlier this month and in August. There is reason to believe now is the right time to buy the security on the dip, though, as the shares have just pulled back to historically bullish trendline, which could soon launch AMZN higher.
Specifically, Amazon.com stock just came within one standard deviation of its 320-day moving average, after spending over one month above the trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, at least seven similar signals have occurred in the past three years. The equity enjoyed a positive return one month later in 83% of those cases, averaging a 5% gain. From the stock's current perch, a similar move would put AMZN back over the $3,440 mark.
AMZN 320 Day
The options pits have been firmly bearish towards Amazon.com stock, suggesting an unwinding of pessimism could keep the wind at the security's back. This is per AMZN's Schaeffer's put/call open interest ratio (SOIR) of 1.02, which sits higher than all readings in its annual range. In simpler terms, short-term options traders have never been more put-biased in the past year.
Plus, n could be the perfect opportunity to bet on Amazon.com stock's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 28% stands higher than just 27% of readings from the last 12 months, indicating the options market is pricing in low volatility expectations for AMZN at the moment.