Amazon reached a pre-market gap-fill level near $208, and this price has already been touched. With the level tested, the probability of a bounce there is described as lower than before.
The text explains that gap fills may be less effective after the price reaches them and does not reverse straight away. As the move occurred in pre-market trading, a rise during regular hours is still presented as possible, and dollar-cost averaging is mentioned as an option.
If selling pressure continues during the session and the price moves below $208, attention shifts to about $201. This level is linked to another gap fill and is presented as the next support area.
A further gap fill is placed around $193, roughly $9 below $201. This is described as about 4% lower than $201 and is framed as a deeper support if the price drops through $201 and the decline continues.
We see that the pre-market test of the $208 gap fill has likely absorbed much of the initial buying interest at that level. Given the recent market chop following the February inflation data that came in slightly hotter than expected at 2.9%, we are cautious about buying calls for a bounce right here. Any move up from this already-tested zone may lack the strength for a significant reversal.
If the stock continues to sell off intraday and approaches the $201 gap fill, we view this as a better opportunity to sell cash-secured puts with expirations in late March or early April. Implied volatility has risen to 35% on this downturn, making the premiums on these options more attractive. This strategy allows us to collect income if the stock finds support, or to potentially own shares at a more solid technical level.
For those anticipating further weakness, a clean break below $201 would be our signal to consider buying puts. After the tech sector’s strong performance in the latter half of 2025, a deeper correction is certainly possible. Targeting puts with a strike around $195 could prove effective for playing a move down to the next major support.
The gap fill around $193 represents a high-conviction level where we would become more aggressive with bullish strategies. If the price reaches this zone, we will look to establish bull put spreads, such as selling the $195 put and buying the $190 put for protection. This defined-risk trade is ideal for capturing a bounce from what we see as a much stronger area of historical demand.
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