tkhay
Short

Google Overbought

BATS:GOOG   ALPHABET INC
425 6 1
SHORT-TERM TRADE:Google's price had made an new all-time high, but the RSI is at the highest it has been in a year, 77. In the past, when the RSI hit 77 it has falling back. The all-time high is way above the upper envelope's line, when Google's stock price touches or rises above this line it has an correction and falls to the moving average . With such a high move Friday the next y, the stock is overbought and will experience a pull back in the next couple of days. Since the buyers have all bought, now those who want to take some profits out of the table will sell making a correction. You should short it now and have a target 1005 or 1000, depending on your risk level. Your stop loss should be between 1017 to 1023.

MEDIUM-TERM TRADE: The TRIX and the MACD both are falling meaning an divergence is happening. This means an medium-term pullback is around the corner. Since Google             is above 10000, some will take profits off the table. Fundamentally, if earnings disappoint investors this would put selling pressure on Google             , and Google             is usually correlated with the S&P 500             (too many charts to show Correlation coefficient on this idea). You should short Google             at this level and have a target between 930 to 945. Your stop loss should be 1030 to 1040.
You said Fundamentally if earnings disappoint investors... Isn't price up because of earnings???
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tkhay MarketSwingPlayer
3 years ago
In the overall market, if earnings disappoint the major indexes such as Dow and S&P these will bring down the market down. Historically, Google moves with the market (correlation coefficient), if investors are bearish, they will take profits off the table even with Google's recent rise. This won't affect short-term, but will affect longer term where memory of Google's earning won't be in investors minds. If other tech stocks disappoint this will put selling pressure on Google.
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MarketSwingPlayer PRO tkhay
3 years ago
Ok, thanks I understand now. I am waiting for firm bearish candlesticks before shorting. Google can just stay gapped up most of the time. But yes nothing go up forever. Thanks
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FractalEyeZ
3 years ago
Thanks for this study, I appreciate your insights! I can't believe I did not wake up earlier this morning to catch this wild and rapid wave that shot their stock up to an all-time high of $1,019! I will now get prepared to place a Put Option once I get clear confirmation of downward moving momentum. I do believe that GOOG's market price is too high and overbought, but we shall see in the coming days ahead!
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This study was a good application of theory. But theory of numbers is different from reality (fundamentals). +1 to Peter Lynch?
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