Amazon (AMZN) stock appears poised for a strong turnaround, and investors can use stock options to profit from such a move. The stock fell 40 points three times in the last month: from $840 to $800 after the earnings surprise in late October; from $800 to $760 the first week in November; and from $760 down to $720 by the middle of the month.
But in the last week, strong signals point to a strong bullish reversal. These signals appear on the chart.
The width of the Bollinger Band is 128.91 points, which is exceptionally wide even for Amazon. This extremely high historical volatility points to opportunities for timing a trade. Accompanying this are two bullish candlestick patterns. First was the piercing lines pattern, followed immediately by a harami. These mark the bottom of the strong downtrend.