Sunday, March 18, 2007

GOOG: Potential Trade



I've been trading a simple system on GOOG since last fall with good results, so I decided to share this method will all of you on January 1st of this year with a post entitled Simple Is Best.

Since then we've only had one trade and it turned out to be a big winner. The method is basically waiting for GOOG to have an inside week and then you go with the breakout of that week's high or low. The exit is on the close on Friday of the following week. So that means you will be holding the trade for at least 5 trading days. The protective stop is at the other end of the inside week's high or low. So if you are short, the buy stop will go a few ticks above the high of the inside week.

The reason I'm posting about this method now is because GOOG had an inside week last week. If GOOG takes out the low from the inside week, I'll short it. If on the other hand GOOG can rally and take out the inside week's high, I'll buy it. Does this sound simple enough? I thinks so...Let's hope it works again!

9 comments:

Sandro said...

Do you think Google is anyhow better than other Internet mania stocks of 2000?

Kevin said...

I honestly don't know.

John said...

Can you explain "inside week"?

John said...

I read your earlier post, and found out the meaning. Thks. So are you saying you will short GOOG if it goes below 439 and go long if it takes out the high of 456? In eaither case, do you wait for closing on Monday or do you during the trading day, as these events occur? In other words, do you wait for any confirmation? And do you close the trade on this Friday 3/23 assuming it has gone in your favor? Thks

Kevin said...

If Goog takes out last week's low, I will get short. If last week's high is taken out, I will get long. I am not waiting for confirmation or a close above or below those levels. I will exit on Friday next week, not this coming Friday.

Kevin said...

Below 439 to short, above 455.25 to buy.

Bullish Jim said...

Other than the fact that GOOG has huge earnings, huge revenues, huge growth in both categories, and a nice balance sheet they are exactly like the internet mania stocks of 2000. Oh yeah, and GOOG has a reasonable P/E ratio that's been shrinking like crazy and a tiny PEG ratio. All of the above, of course, doesn't mean it's a stock that is going to do well because Wall St really hates GOOG at the moment for some reason. :)

Peter said...

Hi Kevin,

Have you been shorting the market (SPY, QQQQ, DIA) tops of today's rally?

Anthony said...

Kevin,

Google closed above last week's high, today. Have you went long on Google, or you're going to wait? The reason why I'm asking is that it just barely closed higher than last week's high, and I wonder if it still 'validates' your approach.

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