11:20am (EST)

Amazon.com (AMZN, $81.10, up $2.36) had some good news after the bell last night which has helped push the shares past $80. The company has hooked up with TiVo (TIVO, $7.59, up $0.01) and will offer high definition movies and television shows for download to your TV sets through Amazon’s website. Netflix (NFLX, $47.22, up $0.62), somebody is knocking on your door…somebody’s ringing the bell…

The news has helped push the stock past $80 as Amazon now enters the competitive online movie rental business. It’s a crowded field but Amazon has the brand name and muscle to do well in the coming months and years.

I’ve been pretty positive on Amazon over the past month and we played the April 80 calls for a 160% return. Those calls were profiled at 90 cents on March 27th and we starting closing them at $2.35 a week later. If you can’t tell by my body language and from what I’ve been writing, I’m still bullish on the stock.

Those April calls have since expired but the May 90 calls (ZQNER, $2.00, up $0.40) are starting to perform just as well. Many of you got in Monday at $1.40-$1.50 even while the market was tanking and I was still bullish on the stock. I still am but realize that you now have a 50% profit.

The risk going forward is the earnings announcement on Thursday. The cool thing here is that eBay (EBAY, $14.92, up $0.63) announces after the close today. I’ve been telling you that Amazon has been stealing market share from eBay in some areas, so, no matter what eBay says in its earnings, the news should benefit Amazon either way.

If eBay gives cautious guidance, Wall Street will point to Amazon as taking market share. If they miss earnings that could help as well and even if they beat earnings, sentiment will be the sector is doing well.

The point I’m trying to make is that be careful going into earnings holding Amazon as a full position if you have made 50% or more on the trade.

Rick Rouse