Amazon (AMZN) Options Signal Bullish Breakout: Key Strike Levels and Trade Setups for 2026

• AMZN surges 1.44% to $231.73, trading near 30-day highs and above all major moving averages.
• Options data shows heavy call open interest at $235–$250, with a put/call ratio of 0.71 hinting at bullish bias.
• Block trades reveal big money buying 2026-01-16 $250 calls and selling deep puts, aligning with AI-driven growth narratives.

Here’s the takeaway: AMZN’s price action, options flow, and fundamentals all point to a high-probability upside breakout. The stock is sitting at a technical inflection point—either it holds above $228.48 (Bollinger Band middle) or faces a short-term pullback. But the options market is clearly pricing in a bullish outcome, especially with AI and AWS momentum accelerating. Let’s break down why this setup matters for traders today.

Bullish Imbalance in Options and What It Means

The options chain tells a story of conviction. For this Friday’s expirations, calls at $235 (OI: 26,404) and $240 (OI: 17,785) dominate, while puts at $222.5 (OI: 9,451) and $225 (OI: 9,388) offer limited downside protection. The next Friday chain amplifies this trend, with $250 calls (OI: 13,829) and $240 calls (OI: 13,152) as top contenders. This suggests institutional players are hedging for a rally above $235, not a crash below $220.

Block trades reinforce this. The 2026-01-16 $250 call (AMZN20260116C250) was bought in bulk (500 contracts), signaling a bet on AI-driven growth. Meanwhile, deep puts like the 2026-01-16 $230 put (AMZN20260116P230) show some hedging, but the overall ratio still favors bulls. The risk? If AMZN dips below $222.25 (30-day support), that call-heavy positioning could trigger a short-term profit-taking selloff.

News Flow and Market Sentiment Alignment

Recent headlines validate the bullish case. Citi’s $320 price target and a DCF model valuing AMZN at $305 (vs. current $231) highlight undervaluation. AWS’s 20.2% revenue growth and $125B 2025 capex for AI infrastructure are concrete catalysts. Even insider sales (like CEO Garman’s shares) haven’t dented institutional confidence—Dynamic Advisor Solutions just boosted its AMZN stake by 2.5%.

But here’s the catch: The RSI at 40.3 suggests the stock isn’t overbought yet, giving it room to run. However, if AI capex fears or labor issues resurface, the $221–$222 support zone (lower Bollinger Band and 200D MA) becomes critical. Retail traders should watch whether the stock holds above that level—breaking below it would invalidate the bullish case.

Actionable Trade Setups for AMZN

For options traders, the most compelling plays are:

• AMZN20260102C235 (next Friday’s $235 call): With 10,467 open contracts, this strike is a liquidity sweet spot. If AMZN closes above $235 by 1/2, the call could see explosive gains.
• AMZN20260116C250 (2026-01-16 $250 call): The block trade here suggests a whale-sized bet. Buy this if AMZN holds $228.48, targeting a 20%+ move to $250.

For stock traders, consider:

• Entry near $228.48 (middle Bollinger Band) with a stop below $222.25. Target $235 first, then $240 (upper Bollinger Band).
• Alternatively, scale into longs as AMZN tests $228.73 (intraday low) with a tight stop at $227.50.

Volatility on the Horizon

The coming weeks will test AMZN’s resolve. A break above $235 could trigger a parabolic move toward $250, fueled by AI hype and AWS momentum. But don’t ignore the risks: If the stock stumbles below $221, the bullish narrative crumbles. For now, the options market and fundamentals are in sync—this is a setup worth watching closely.