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  • carson5016 carson5016 Feb 27, 2013 4:38 PM Flag

    RSI Divergence

    Anyone else thinking this is a great short opportunity? Having a tough time pulling back to all time highs by a small amount but if you look at the RSI on the daily and the weekly both have huge divergence to the short side. Same setup as AAPL had at $705. Could see a big correction with sequestration and the fact that this thing is insanely overpriced compared to appl. Although it is right that the market can stay crazy longer than you can stay solvent. I just see a technical issue telling me its running out of steam...

    Sentiment: Sell

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    • rodgwag Feb 27, 2013 10:35 PM Flag

      This is a great call and I think that it will play out tomorrow with a big 20 point drop after a slightly higher open and early trade.

    • Its not far fetched to expect GOOG to correct at some point, over the past 5 years it routinely has

      2008 from 585-262
      2009/10 from 619-436
      2011 from 629-474
      2012 from 650-564
      2012/13 from 767-647

      So every time it has popped a new 52 week high over the last 5 years it has retraced an average of 173 points

    • Hi Carson, I think this is a great short,but IMO for option swing trades only. I closed my 2/16 $800 calls late in the day today and went short via 2/16 $800 puts.Yesterday the stock closed below the 10 day EMA which was a terrible sign in an up market.The chart looks tired and it seemed today like it was driven up and supported by the upgrades and a lot of retail buyers who may slip out from under the upgrade and press ether on a downturn.I believe today's volume confirms that suspicion.It's interesting how the number of $800 contracts for 3/16 was about equal for both the puts and calls.Unless it breaks out above or below its recent $790-$808 trading range I think you can buy calls when the RSI hits 30 and buy puts when the RSI hits 70 and make money.

600.70-5.55(-0.92%)Sep 4 3:59 PMEDT