Amazon Investors Eye Bearish Hedge Amid Weakened Momentum

Investors with shares of Amazon (AMZN) may want to consider a bearish hedge due to weakened short-term momentum, according to recent technical data. The stock has been trading around $252, below its 20- and 50-day averages, with an RSI near 38 and negative MACD.

The preferred hedge is a Bear Put Spread, which involves buying a put option with a strike price of $250 and selling a put option with a lower strike price of $235. This provides downside protection while reducing the premium cost, but caps the maximum hedge payoff below $235.

According to the trading framework, if AMZN falls below $250, it would be considered bearish confirmation, with the next meaningful downside zone at $240-$235. On the other hand, if the stock recovers and closes above $261, the investor's bearish stance may be reduced.