Today's option skews scan showed Amazon.com Inc (AMZN) at the top of the put side of the list. This uptick in skepticism is interesting as we recently saw that the stock was sitting above long-term support. Drilling down into the sentiment profile shows a number of interesting aspects.

A point made in last month's post on Amazon.com was that there is ample room for upgrades. According to Zacks, only 4 of 18 analysts (22 percent) rank the stock with a "buy" rating. Adding to the skepticism on the stock is data on short interest. Data collected by our Quantified Analysis group shows that 10% of the stock's float is sold short. I would consider these to both be encouraging points as it suggests there is a supply of sideline money that could come back into the stock.

Of course, the main problem here is that this isn't a strong market. As stressed in this space many times, our methodology states that the contrarian implications of sentiment are strongest when they run counter to the price action. Shares of AMZN are holding above long-term support but I believe that few would look at the daily chart below and call that "strong."

I think that what this boils down to is the need for a catalyst. We have encouraging signs on the sentiment front but need to see signs of life from the stock. One technical test here is how the stock reacts as it nears an oversold condition. The shares are still well above their November low so I would want to see them find support above that.

I haven't seen a published date for earnings but it looks like they should release around the end of this month. A better-than-expected report could be the catalyst that starts to pull some of that sideline money. However, I wouldn't front-run that release in this market. An unwinding of skeptical sentiment usually takes time to play out and there will likely be good entry points after the report.

Chart Courtesy of Thomson Financial