Amazon hit its 10th all-time high of the year on Tuesday, but one trader says that the online retail giant will "blast off" to even more record levels ahead.
According to AlphaShark trader Andrew Keene, Amazon is "heading to $1,000" based on what he sees in the daily and weekly charts, matching a handful of Wall Street analysts' price targets for the stock.
On the daily chart of Amazon, Keene points out that Amazon "broke up to the upside around that $860 level," a level that he believes currently acts as "support" as it is also where the stock's 20-day moving average is found. While Keene usually looks at a longer-term moving average for stocks, he emphasizes that since Amazon's rally is so "parabolic," he needs to use a shorter time frame to predict the stock's movement.
But Keene's main reasoning for betting on a rally up to $1,000 lies within the stock's weekly chart. According to Keene, every time the stock has hit the 20-week moving average, it has been bought and headed higher, a trend that the trader believes will keep repeating itself.
"I think Amazon will be bought on any pullback whatsoever," Keene said on Tuesday on CNBC's "Trading Nation," as the stock will eventually head higher even if there's a drop.
But since the $1,000 level is 10 percent above Amazon's current price, Keene does have a way to trade Amazon in case the stock doesn't carry its momentum in the short-term. In this case, Keene wants to take the old "support" level of $860 and sell the May monthly 860-strike put while buying the May monthly 850-strike put for a credit of $2.5.
If Amazon closes above $860 on May 19 expiration, then Keene would keep the $250 credit from making the trade. But if Amazon were to close below the breakeven of $857.50 on May 19, then Keene would lose money on the trade, and would be out $750 if the stock closes below $850.
Amazon has soared more than 20 percent year to date, gaining about 7 percent since the end of March alone.