DailyPlay – Opening Trade (AMZN) – May 01, 2025

AMZN Bullish Opening Trade Signal

Investment Rationale

Amazon (AMZN) presents a compelling bullish setup heading into its Q1 2025 earnings report scheduled for Thursday, May 1st after the close. With improving consumer sentiment, easing logistics costs, and a robust rebound in cloud spending, Amazon is positioned to surprise to the upside—particularly in its high-margin AWS segment. Market participants appear overly cautious after a steep drawdown from February highs, creating an asymmetric risk-reward opportunity for a short-term upside move. A high-probability technical setup combined with strong fundamental tailwinds makes AMZN a timely bullish play into earnings.

AMZN’s technical setup heading into today’s earnings report shows signs of improving short-term momentum. The stock is trading above its 20-day moving average of $184.17, suggesting some upward pressure in the near term. The MACD has crossed above its signal line and continues to rise, pointing to a shift in momentum. The RSI has moved higher but remains below overbought territory, which leaves room for potential upside. Volume has declined during the recent consolidation, which may indicate reduced selling interest. The stock is currently approaching resistance near $188. A close above this level would be an encouraging development and could set up a move toward $200, an area that aligns with the 200-day moving average. While the stock remains below some longer-term trend levels, the recent technical action leans positive and may support further gains if momentum continues to build.

Amazon continues to demonstrate fundamental strength even amid macro challenges, supported by its sticky Prime user base and enterprise-leading AWS platform. While the retail segment may face inflation-related pressures, its ability to undercut prices and streamline logistics remains a core advantage. AWS, which now accounts for the majority of operating income, is expected to provide stability and earnings visibility going forward.

• Forward PE Ratio: 29.76 vs. Industry Median 18.08
  
• Expected EPS Growth: 17.40% vs. Industry Median 7.91%
  
• Expected Revenue Growth: 9.57% vs. Industry Median 3.61%
  
• Net Margins: 9.25% vs. Industry Median 6.97%

To express a bullish view on AMZN into earnings with limited risk, consider the May 2, 2025 190/205/215 open-wing call butterfly for a net debit. The trade performs best if AMZN moves toward $205 by Friday’s expiration, offering a 4.5:1 reward-to-risk ratio. It can also do reasonably well if AMZN closes above $215, since the open-wing structure allows for some upside flexibility.

AMZN – Daily

Trade Details

Strategy Details

Strategy: Open Wing Call Butterfly

Direction: Bullish Open Wing Call Butterfly

Details: Buy to Open 3 AMZN May 2 $190/$205/$215 Call Butterfly @ $2.74 Debit per Contract.

Total Risk: This trade has a max risk of $822 (3 Contracts x $274) based on a hypothetical $100k portfolio risking 1%. We suggest risking only 1% of the value of your portfolio and divide it by $274 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is expected to break through from an area of resistance.

1M/6M Trends: Neutral/Bearish

Relative Strength: 5/10

OptionsPlay Score: 97

Stop Loss: @ $1.37 (50% loss of premium)

View AMZN Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Wednesday ‘s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View AMZN Trade