I was semi-bored with Google for a bit. Keyword: was.
Now, GOOG is on the minds, screeners, charts of many investors; especially mine.
The Internet giant was not the first to hit $1,000. PCLN was – and I was quite sure after PCLN did it, that GOOG would also do it. After all, GOOG doesn’t like to be second in anything.
Dow Theory
Dow Theory states that there are three phases in the markets:
- accumulation,
- public participation and
- distribution.
It truly appears to my trained eyes that GOOG was in a distribution phase from May, 2013 until the 18 of October. $848 was a strong support price, with GOOG bouncing off that, with seemingly glorious buying pressure 3 times. $921 was also a strong resistance. With a gap as large as the one GOOG had on earnings, this is likely a continuation gap.
Upside Targets
GOOG stock had plenty of time to “rest” and truthfully a lot of investors were getting semi bored with it as it moved in a $60 channel for the better part of four months. At this point though, there isn’t much stopping GOOG. My thoughts, is GOOG will likely continue higher, trading to approximately $1063 (my next target based on Fibonacci analysis). IF GOOG has a retracement from there, and begins to form a higher low and bounces, this stock could become a real equity version of Elton John’s song Rocket Man.
Covered Call
This is a fun stock to trade now, because of MINI options. That means, investors can buy 10 shares at a time, reap the benefits of the covered call strategy, which really is a pretty solid plan on GOOG at this point in time, in my opinion. Owning 10-30 shares and selling calls as it begins to get over bought, letting it retrace before in continues higher. I’m excited about this trade longer term.
Could be a nice little move! As always, mitigate your risk and let me know how I can help!
