Non-Identical Twins

I am putting back on a pairs trade that I had in place late last year. The trade involves being Long 1 AMZN and Short 8 GME. The thesis is still that GME will continue to come under enormous competitive threats, from the likes of AMZN and WMT, in the retail of games and other similar products.

The real threat however comes in the form of this: at some point game players will download the games directly and/or access them via the Internet. The demise of GME falls into my Brick and Mortar Shell basket of stocks.

Given my current view of AMZN, having found a bottom here near the 163 level, It feels like the right time to put this trade back on. The AMZN Daily chart, as well as the GME Weekly chart are both below:

 As a bonus to this pairs trade, one could start to consider CSTR as a threat to GME (and somewhat AMZN) if they do in fact begin to provide game rental/exchange/purchase through their network of kiosks as well as their supposed download service.


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