Amazon Is Ready Sell-Off Hard

Yet another reader testimonial on my Amazon.Con research report:

I have been involved in providing investment research for almost 30 years and have seen plenty of good and bad products in that time. During the 1998-1999 tech bubble, a select few of us used to gather and laugh at the lunacy that passed for research in order to justify tech company valuations (while we bought precious metals shares). No one was doing credible work when the public most needed it. And here we are again but this time we have your inputs establishing sanity, a true guiding light. The Amazon.con report is a seminal piece of work—thorough, easy to read, based on real proprietary investigative work demonstrating the lack of equity value and clear on both conclusions and trading strategy. Thanks for giving investors non-cheerleading reality, delivered in the name of moral decency.   – Mark in New Jersey

I’ve noticed that AMZN has quickly retreated every time it pops up to the $380 area.   Today, for example, AMZN was one of the few stocks that were green in the morning.  It was up $6 to $380 at one point, while the SPX was sliding lower.  AMZN ended down over $3 today.  It put in an “outside reversal day” down, which is when the high and low of the day exceed the previous day’s high and low.  It closed lower than yesterday as well, which is technical signal that hedge fund algos will likely pick up on and begin unloading shares.  Note:  the hedge fund world is significantly over weighted in AMZN.  Click to enlarge:

One fact I had not paid attention to until today is that AMZN hit an all-time high in late January 2014.  It sold off hard.  While it has traded higher on its fraudulent Q4 earnings report (see my research report for details), it has failed to come close to its all-time high despite the SPX having reached several successive all-time highs.  This is another very bearish trading signal the hedge fund black boxes will no doubt exploit.

When the downside momentum grips this stock, it will be a sight to behold.  AMZN has experienced declining operating margins since 2004.   In 2004 it was achieving industry norm 6% operating margins.  Now its operating margin is zero.   Plus it’s consuming cash like starving wild animal ($9 billion in debt issued in the last 24 months).

Now is the time to short this stock and my research report explains why this Company is at risk for eventually hitting the wall:  AMAZON.CON