The Rotation Back Into Amazon Has Begun

JC Parets
December 17, 2019

How quickly people forget what a beast Amazon has been for years. All it took was an 18-month consolidation for investors to fall out of love with one of the greatest stocks in American history.

The bet the bears are making is that Amazon has been lagging and dragging down the Consumer Discretionary sector, considering it's 22% weighting in the index $XLY. So if you believe this is a big market top, I understand why you would think Discretionaries are setting up for a big fall. I totally get that.

Here's the chart:

As my annotations clearly show, my bet is that US Stocks go much higher, and for that to happen I believe Discretionary can't be getting killed. So the way I see it, if stocks are going higher, and Discretionaries need to, at least, participate, then we need to see rotation into Amazon. It's just math.

So my bet is that, yes, $AMZN is about to rip and Consumer Discretionaries help lead US Stocks throughout this next leg higher that is just getting started.

I like $AMZN long if we're above 1750. I also really like adding more to that long position if we're above 2000. I think we can see 2900 pretty quickly.

It's interesting. Lately I've been thinking a lot about some of my targets for a few of America's biggest companies, especially $MSFT $AAPL $FB $GOOG and, now, $AMZN. I have some really high targets for many of these, 50% plus in some cases. Just think about the market capitalization of these names and what those implications would be for the overall indexes.

This is what I'm thinking.

Where is your head right now? Are we on the same page?

JC

 

Did you see our short video about our trip to India? The team did a nice job with it. Check it out!

 

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