It’s a tale as old as time. As the rest of the world struggles, Amazon is an absolute juggernaut that keeps getting bigger.
Amazon reported a 37% increase in earnings as pandemic sales launched company profits into the stratosphere. Revenues were reported to be $96.15 billion and Amazon Web Services reported net sales of $11.6 billion. What makes this record-beating earnings even more impressive is that the company spent $4 billion on coronavirus-related measures (protective equipment, enhanced cleaning, wage increases, etc.) Amazon CFO, Brian Olsavsky, also said that it would add 100,000 seasonal jobs to its current workforce of 900,000. And the company is expecting the biggest holiday shopping season of its existence.
Despite all this profitable news, Amazon stocks immediately dropped following earnings.This drop is most likely due to increased operating expenses due to COVID19. But as you know, I think AMZN’s upside is endless given the shift by consumers to the e-commerce sector. That’s why on this pullback – I would be looking to add AMZN to my setup with options. By using options, it allows me to get AMZN for the right price for my risk tolerance.
Trading tip of the week…
The trading tip I have this week is an important one given the current market climate. We’ve seen volatility rampant lately. And when the market is moving this much, it’s important to read the warning signs to ensure you can protect yourself.
And one of the biggest warning signs is the VIX itself. You see, when the stock market spikes higher, most of the time you will see volatility drop. For example, let’s say the VIX jumps 10-20% in one day – I can promise you that that day is not the day to buy calls. And that’s because with the VIX moving higher, we most likely won’t see much positive action in the market.
On the other side of the coin, when you see a rally back post volatility spike, a lot of call setups won’t move up as much as they should due to a collapse in volatility – not delivering the profits you would expect.
So, to put it simply, proceed with caution when it comes to days where the VIX spikes a lot. The great thing about the stock market is there will always be more time for you to get some skin in the game – so, there’s no need to rush. Instead, the best thing you can do for yourself is be mindful of your trading plan and risk tolerance. This will allow you to be well informed investing decisions and put you on the road to profitability before you know it.
Earnings report that caught my eye:
In more earnings report news, I’ve gone through mountains of numbers and this one company has grabbed my full attention. And I think that this earnings report will be the one to watch in the upcoming week…
Bausch Health Companies Inc. (BHC)
Bausch is an international health company that manufactures pharmaceutical devices, medical devices, and over-the-counter products.The company released preliminary Q3 results, with the full report scheduled for tomorrow, November 3rd. It expects Q3 revenue to increase by 28% over Q2 sales and this caused the company’s stock to jump up 12%.
And the FDA recently granted Bausch’s sickle-cell disease medication an Orphan Drug Designation, which means they will get a seven-year period of market exclusivity and U.S. government funding. This combined with the current outlook has me feeling positive about this stocks performance in the near future.
That’s why I’ll be keeping a close eye on this earnings report and the second I see an opportunity, you’ll be the first to know.
Speaking of the VIX…
Given the rollercoaster year that’s been 2020, this indicator has never been more relevant.
And believe it or not, one of my colleagues was instrumental in laying the groundwork for what would eventually turn into the VIX…
That man is Shah Gilani, trading veteran and Chief Investment Strategist at the Money Map Report.
In fact, he recently put together a one-of-a-kind presentation with the help of this indicator to identify the best (and worst) stocks in today’s markets.
In his stock-picking lightning round event, Shah will show you the stocks you should consider buying, and the ones you shouldn’t touch with a ten-foot pole. Click here now for access.