$GOOG Bounces Off Key Support

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.

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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.

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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.

 

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$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.

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Profile photo of uranium-pinto-beansKnown to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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