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.
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.