Google. It has become, more or less a world renowned verb, adjective, noun and potentially an adverb in the right instance. Did you know, the term Google, is a creative spelling of the word googol which is a number equal to 10 to the 100th power. And yes, I had to “google” that to make sure.
Google has single handily changed the way humans search for information and in a bigger picture, changed the way the majority of humans on earth live their lives. The company is the true cornerstone for internet marketing, advertising and employee happiness. The stock itself is also quite fun to trade.
Analyzing the chart, GOOG had a very pretty triple bottom in June, July of 2012, followed by a very significant and fun bullish run. We had earnings in late October of 2012 which provided one of the most delicious bearish candles I have ever seen. It showed me a bearish continuation was quite prominent and even eminent at the time.
Present day, we are running into quite a strong resistance, once more, around the $742.00 region. The green box represents a location where my analysis confirmed the placement of a bull put spread.
I have a bullish trigger at $744.96. It would increase a trader’s probability of success, if that person waited until a few minutes before market close, to see if GOOG has a strong close above that resistance. $742 is and has been a strong pivot point in the past and will likely become one again.
If GOOG does fail the resistance, it will likely trade back to the gap created in the beginning on January. That gap with either fill completely or act as a strong support in conjunction with the 100 simple moving average. At that time, a trader would find it prudent to review analysis on entering another Bull Put Spread below that strong support area.
I like the set-up for this trade and it has the potential to have a great risk/reward ratio. An initial target realistically would be the open of the 10/18/2012 candle. With bearish sentiment that strong, there will likely be sellers there again.
