Taking Advantage of an Analyst's Changed Recommendation

On Friday morning, I came across the following tweet:

@Street_Insider Goldman Sachs Removed Amazon $AMZN from their Conviction Buy List. Keeps Buy rating and ups tgt to $195

In the trading account we came in long Amazon.com stock and short Oct8 155 Calls (paired). When I came across the @Street_Insider tweet, my reaction was that the Goldman Sachs recommendation to remove the stock from the Conviction Buy List but up the stock price target was a wash and that if the stock sold off on the news, the move should be faded.

Then I tweeted:

@biggercapital Will be fading RT @Street_Insider: Goldman Sachs Removed Amazon $AMZN from their Conviction Buy List. Keeps Buy rating and ups tgt to $195

After making the first profitable trade (see the trade blotter below), I tweeted:

@biggercapital Thank you $GS for $AMZN call. We know your game. Will fade more later on on a selloff from these levels.

Getting into second profitable trade:

@biggercapital back in $AMZN 153.5

Getting out:

@biggercapital out of $AMZN 154.5

One final tweet:

@biggercapital The difference between a buy and a conviction buy? More $$ in $GS pocket, never be fooled. $AMZN

During the selloff we had the opportunity to unwind the AMZN Oct8 155 Calls and sell the Oct15 155Calls for a nice spread.

Click to enlarge. 

Ka-ching! Are there other ways you know of to take advantage of an analysts' recommendations?

Written by Michael Bigger. Follow me on Twitter and StockTwits. 

Comments

[Aris]

Michael hope you are well,

Here is how I Fade Traded SOHU last night inspired by your post

http://bit.ly/cq8FF0

Aris

[Michael Bigger]

WOW!!!! Aris, I am impressed. I missed it on the stream. The downside of having many followers. I have added you to a special list so that I can see that info in real time. I am haopy you made $ on this.