Tuesday, October 11th, 2016

GOOG Whats happening with this stock?

GOOGLE is the biggest stock there is in the whole universe of stocks. It is an 800 ib Gorilla in the room. Biggest means the price numerator and its price action. The stock is a mover , it doesn’t stays quietly, it moves 10-15 points on a given day and unless you have the stomach to handle it , you may as well stay out of its range. This is not for the faint of the heart in my opinion even though its volatility is low, compared to other stocks.

The stock has no news, nothing. It made a high of 844 and ever since it has been selling in an orderly fashion. The chart looks like a River flowing from one side to the other. There is somebody out there who gets up in the morning and sells a regular amount of shares everyday and the stock keeps going down under the weightage. Technically speaking GOOG is bearish. It broke the 21 day and than 50 day moving average, than it slided through the Bollinger bands hard and is now closing on the outside. When the bands get tagged this hard and the stock is oversold, a bounce usually occurs. Because if you look at the chart, this is what this stock has done time and again. Technical buyers enter and jack it up for few point or it moves to the middle of the bands.

Trading GOOGLE options naked requires an additional ounce or two of guts. Its not for everybody and I can see why. The margins are horrendous for one and the risk something can go wrong is always present there.

Lately GOOG has been disjoined from SPX. It has not moved in tandem with SPX which it used to do. It has its own agenda, its own territory and ways it moves. If this particualr seller isn’t in the stock this would have moved with the SPX as usual. GOOG has earnings on April 18, 2012 and it remains to be seen which way it will go. The long term trend line is still intact and would it break that ? That answer will come in next couple of sessions. If it wont break that line its going up and towards the 50 day moving average possibly.

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