Amazon and Netflix now above short sell limit prices, but use caution

Investor enthusiasm over Ben Bernanke’s declaration yesterday regarding quantitative easing was particularly frothy for some of the stocks in our Equity Trades portfolio.  Amazon (NasdaqGS: AMZN) moved above its short sell limit price of $390 while NetFlix reached a new all-time high also in excess of its short sell limit price.  To a certain extent both stocks are also benefiting from the Christmas selling season as each is expected to report higher than expected online sales.  For that reason, we suggest caution in terms of timing in placing short sell or put option orders on these stocks as this exuberance may persist into January.  We are also temporarily raising the stop loss limits on these positions to account for this “holiday bump”, but will reevaluate after December sales figures are released in January.

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