$GOOG Trading Gameplan

The chart below is courtesy of All About Trend Premium Newsletter. If you want charts like these sign up for their FREE newsletter and receive their free e-book: "How To Outperform 90% Of Wall Street With Just $500 A Week". 

A down open like Friday's action takes GOOG to the 50-day average. Keep in mind that GOOG makes up 5.5% of the NDX 100 index. Seeing as how AAPL has bit the dust and it's not able to do the heavy lifting in this index too much anymore what better name to gravitate to than GOOG in order to keep the drive alive.  We've seen this time and time again with AAPL in the past due to its heavy weighting being able to lift the index time and time again so MAYBE GOOG is going to start taking its place.

 

That being said:  

GOOG REPORTS EARNINGS 1-22 (TUESDAY) After The Close

 

This means we have to go long this name Tuesday IF we see any opening weakness. Why are we going long ahead of earnings? First off we are willing to take the risk knowing full well the end result could be a loss and secondly is that this issue have been selling off into earnings and is at a support zone of the 50 day technically speaking.  It's your choice whether you want to trade along side you know. Nobody said you had to, if you don't feel comfortable then don't take the trade.

 

 

Market consensus on a potential earnings move for GOOG can be calculated roughly by adding the combined premiums of anat-the-money call and put that expire after the announcement, plus 25%. Currently that equals about $60 using the January 25expiration. The consensus is therefore that GOOG will make a move from its current price of $704, either down $60 or up $60 after the announcement is made. The consensus is not a guarantee! Post-earnings moves can be surprisingly large, or surprisingly non-existent.

 

A pop sends it flying, a drop sends it sinking so it's really a sink or swim trade aside from the technicals. 

If you want charts like these sign up for All About Trends FREE newsletter and receive their free e-book: "How To Outperform 90% Of Wall Street With Just $500 A Week".