Amazon had an incredibly exciting run earlier in the year. However, that run seemed to have stalled out toward the end of April. Since then, Amazon has traded relatively flat. However, the company will be celebrating it's 20th birthday soon and has a big marketing plan to kick off the next decade. The company announced that July 15th is going to become known as “Prime Day”. Today, we'll talk about the big plans Amazon has for Prime Day, how the event addresses one of the biggest questions revolving around the stock, what I expect to see from the stock moving forward and how you can capitalize on the trends.
What Is Prime Day?
Prime Day is a one day event put on by Amazon. On July 15th, Amazon will be offering massive deals. As a matter of fact, they've gone as far as to say that Prime Day deals are going to be bigger than Blck Friday deals. There is a catch however…in order to take advantage of Prime Day savings, shoppers will have to be a member of Amazon's Prime service. In a statement, here's what Greg Greely, Vice President of Amazon Prime had to say…
“Prime Day is a one-day only event filled with more deals than Black Friday, exclusively for Prime members around the globe. Members tell us every day how much they love Prime and we will keep making it better…If you're not already a prime member, you'll want to join so you don't miss out on one of the biggest deals extravaganzas in the world.”
Does Prime Day Address One Of The Biggest Questions Revolving Around Amazon?
Amazon had an amazing recovery earlier this year. However, one of the big questions about the stability of the company remains…Does Amazon make any money from Prime? The reality is that Prime members pay a relatively low fee for a large amount of services. Free 2 day shipping, premium streaming video, and more are all available through prime at $99 per year. While there's no doubt that some members actually cost Amazon more money than that, it's also clear that for Prime to be profitable, it has to build tons of members. Therefore, those that don't use the service very often equal out the high cost of those who do. This is where Prime Day comes in.
There's no question that consumers love to spend money; especially when given the opportunity to save money on their purchases. With that said, Amazon Prime has marketed Prime Day as an event that will have more deals than Black Friday. That marketing has hit radio waves, television ads, online ads and more. With so much exposure, there's no doubt in my mind that Amazon is going to have a ton of traffic on Prime Day; even from non-Prime members. The goal here is to get these non-Prime members to sign up for the service; building the pool of paying members even larger. In my opinion, this is exactly what Amazon needs!
What We're Likely To See Moving Forward
Moving forward, I think that we're going to see a decent breakout in the positive direction from Amazon. Shortly following Prime Day, I would imagine that Amazon will release data with regard to how many members signed up during the event. Considering consumer impulses when they see a good deal, I'd imagine that number is going to be pretty big. If all goes well with the event it's likely to prove to be a catalyst that pushes the company's stock past the current resistance point.
How Binary Options Traders Can Take Advantage Of The Trends
From now until the day of the event, I'm expecting to see little change from Amazon stock. However, on July 15th, when the event starts, I think we're going to see a spike in Amazon's value. Also, following the event, we should see data from Amazon relatively soon that's likely to excite investors and lead to more uptrends. With that said, this will be a strong stock to watch for profitable call option opportunities!
What Do You Think?
How do you think Prime Day will affect Amazon's stock? Let us know in the comments below!