In Early September I noted $GOOG and the $845 level. The stock has very strong support there and I was looking for a $45-$50 move higher. $GOOG out did my projection, as it rallied $60 higher before pulling back.
Today $GOOG was falling again, down to that $845 level. I bought the calls for a bounce and alerted the private twitter feed to watch for a strong bounce from this level.
Those calls surged over 200% late in the session as $GOOG climbed from $845 to over $860, a strong recovery off that ever important support line. The below chart shows the $870 calls with the pink circle being the time when I sent out that tweet to om.com private twitter members.
$GOOG remains at an important juncture. The stock has put in quite a nice head and shoulders pattern with $845 as the neck line. This is bearish for the stock, however, nothing is written in stone. I like the support and we have currently the 5 year+ long term trend line support (GREEN LINE) just below this $845 level. A bounce to the top of the trendline is what I deem the most likely outcome short term. That would set the stock up for another test of the $900 level. We have earnings next week, which will dictate the medium term direction of $GOOG. I think right now, the stock has more upside coming.