The beast that is Amazon.

President Trump used the U.S. Postal Service to take a shot at Amazon (AMZN) - Get, Inc. Report several months back. The stock suffered initially. I know that because I am long the name, and tried (with some minor success) to trade around the event. Amazon shed more than 265 points as March turned into April.

We get it. President Trump and Jeff Bezos, who also owns the Washington Post probably aren't going to tailgate together on Sunday afternoons this autumn. But can they agree to co-exist? Have they already sort of done so? Amazon may suffer at the mention of being targeted again, but has already shown an unparalleled resiliency. The shares closed Thursday above $1,600 and have been scraping resistance at that level for about a month now, as this chart shows:

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You'll immediately see two things on this chart, both of which suggest technical control of the name. For one, the share price strictly obeyed a 38.2% Fibonacci retracement of the September/October 2017 lows through the March 2018 highs. Secondly, as the shares recovered, the price colored strictly within the lines painted by the lower chamber of the pitchfork drawn along the trend provided by the same timeline.

Fascinating. Understandable. What this tells me is that Amazon looks to be at support as provided by the lower trendline of said pitchfork.

TheStreet Recommends

Buy it here? Not so fast, tough guy. The share price has stalled at this level repeatedly throughout the year, and this is simply too expensive a stock to make a mistake due to haste or a lack of due diligence. AMZN is trading at 80 times forward looking earnings, you know.

Should a daily Moving Average Convergence Divergence (MACD) that looks poised to recross in a bullish way propel Amazon above the highs of the year, I would still need to see at least one successful defense of say, the $1,615 level before I could endorse an add here. I'd rather give up a few points on purchase price to gain some certainty than to buy the shares this close to resistance with no idea if that ceiling will crack.

A Daring Amazon Play (But Not One for Me)

Amazon will report second-quarter numbers on July 25, and as of Thursday night, July 20 $1,350 puts were still paying $4.17. Does getting $417 on a 100-share contract for nothing seem like easy money? It might, unless Amazon stumbles into those earnings. Then you'll chew your fingernails off, and you better have $135,000 ready to buy 100 AMZN shares. Not an acceptable risk for your average home-gamer, but it depends on your risk tolerance. Another option: July 20 $1,200 puts last paid $1.25.

That said, I'm not playing this trade along with you. I'm already long Amazon, and although I'm often willing to make an options trade to raise revenue, names like this pay outsized premiums for options trades because they carry extraordinary risk. You have been warned.

Amazon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN? Learn more now.

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