GOOG ($800.93): This stock is broken. Before you look at me like I’m crazy and tell me how it’s only 4.3% away from its all time high you should know that GOOG just suffered its 2 highest volume down days since October. What you should also know is that for 3 years in a row GOOG’s June and July highs have been below what were its highs for the year going into those months. More importantly though, GOOG fell more than 3.3% away from its all time high in the last week.
Why is that such a big deal? Because if you look at the pullback off of the $844 all time high, you’ll notice that on April 30th GOOG managed to get back within 2.5% of the $844 all time high. From that time on, GOOG never fell more than 3.3% away, nor did it ever then experience a 2 day losing streak on the way up to a new all time high. Moreover, GOOG recently suffered a 4% drop from its most recent $910 high to its most recent $873 low, which is greater than its most recent pullback of 2.9% from $891 to $865. Pullback was of a greater magnitude, and on greater volume, those are both negatives. Another sign of negative price momentum is that GOOG had its first gap down where the price closed below the opening price and wasn’t then followed the next day by a higher high since April 5th.
GOOG has a ton of support levels below its current prices. Way less resistance levels lie ahead, but the psychological effects of a market that just lost key support is what is going do this name in. In a strong market traders buy weakness, in a weak market traders sell strength. This market went from strong to weak the last week and I believe GOOG is a stock that will most suffer the consequences of that shift.
nice work.. but I can tell you with 100% certainty that the stock will go higher... closed at 880... and I will be my last dollar that the stock will be higher all of the coming week.. how do I know? because I have done the same math you have .. and I actually bought puts .. which means those puts will expire worthless... I am my own contrary indicator... I know for sure Google will go to 900 again and not to 860... because I have the 860 puts..... book it...
Lastly, I’ll leave you with this stat, in each of the 9 years since its IPO GOOG has suffered an average pullback from high to low of 23% at some point during the year, with the smallest being 13% and the largest being 41%. This year, GOOG’s max pullback has been 9.8%. If that is going to be the max then it will be the smallest yearly pullback in its history and have extremely bullish implications. I’m not ready to believe that though and would rather bet on new highs once GOOG is back above $900. Until then, the risk/reward is in favor of the short trade. Below $865 and $800, not $850 will start to serve as a magnet.