Amazon.com Inc.'s (AMZN: sentiment, chart, options) recent post-earnings surge caught many investors off guard. In fact, with the shares now trading with a price-to-earnings (P/E) ratio in the 68 region, some traders are downright concerned. However, as author Mark Hulbert states in this recent article from MarketWatch, "we might not want to be too quick to dismiss Amazon.com's recent strength." For his reasoning, Hulbert cites the "so-called Nifty Fifty stocks from the early 1970s."

Per a recent study by Jeremy Siegel, finance professor at the Wharton School of the University of Pennsylvania, "a portfolio that bought all 50 stocks at the stock market's peak in December 1972, and held them for at least two decades, would eventually have taken the lead over the broad stock market." To be sure, Hulbert states that some of these results could have been impacted by impressive gains by Wal-Mart Stores (WMT), "whose gargantuan percentage gain since then (north of 10,000%) would skew the results particularly strongly in favor of the long-run performance of the Nifty Fifty."

He also emphasizes diversification in your portfolio, and notes that it took years for the Nifty Fifty to justify their elevated P/E ratios from the early 1970s. Still, Hulbert believes that "Amazon.com's new record high is a harbinger of good things to come many years down the road for those beleaguered investors who are still nursing the wounds they suffered earlier this decade from the bursting of the Internet bubble."

In the long run, Hulbert may eventually be proven correct in his bullish leanings toward AMZN, but there are some serious short-term concerns that must be considered before jumping on the bandwagon. While we tend not to focus on P/E ratios at Schaeffer's Research, let's take a moment to put AMZN's current ratio in perspective. The highest P/E ratio among the company's competitors, according to Google Finance, lies with Google Inc. (GOOG), which sports a ratio of 34.34.

Furthermore, Netflix Inc.'s (NFLX) P/E ratio arrives at 29.09, while Hasting Entertainment Inc.'s (HAST) ratio comes in at 22.78. Just so we're clear, AMZN's P/E ratio comes in at somewhere near twice the next highest reading from a related company, which, from a contrarian perspective, has to send up at least a few warning flags for potential investors.

Other warning flags can be seen in the stock's sentiment backdrop. Specifically, AMZN's Schaeffer's put/call open interest ratio (SOIR) of 1.00 ranks below 72% of all those taken during the past year, meaning that options traders have rarely been more bullish toward the shares. What's more, 12 of the 21 analysts following AMZN rate the shares a "buy" or better.

In fact, the only group that wasn't all warm and cozy in AMZN's pocket was the short-selling community. Currently, more than 5% of the stock's float is sold short, following a 9.5% plunge in short interest during the prior two weeks. In all likelihood, these bears were blasted out of their positions in the wake of the company's better-than-expected quarterly earnings report, creating a short-squeeze situation that contributed to AMZN's 26% post-report rally.

Going forward, at least from a short-term perspective, AMZN traders will want to keep a keen eye trained on the 118-118.50 region. The shares have begun to pull back following their earnings-induced euphoria, and a breach of the 118-118.50 region, which marks AMZN's earnings-gap close, could send the shares quickly down for a test of support near 111-110 -- the security's earnings-gap low on Oct. 23. Such a development would be especially true if short sellers begin to reestablish their bearish positions following the stock's recent peak.