GOOG Follow Up

I mentioned GOOG several times last week as another speculative long play, it looks like we might get a SCBO (Second Chance Buying Opportunity), if you are interested of course.

Here are the updates on GOOG,

June 12

June 13 #1 This is when the head fake set up became apparent

June 13 #2

So here's the idea and update...

 In the white box, it became clear something was changing in GOOG's short term trend, this could go out to the sub-intermediate trend, as you can see, GOOG is responding to the set up we put together last week.

 After a downtrend, a symmetrical triangle is considered to be a consolidation/continuation trend, traders would be looking for GOOG to break lower and start the next leg down, this is where we often find good trade set ups as technical analysis is used against traders' predictability. To be clear, I don't like GOOG for anything more than a short term spec. trade, longer term it remains ugly, but that doesn't mean some money can't be made on a counter trend move.

 We expected a head fake break down and got one, the same thing traders would be looking for except they would have been shorting the break where we were buying it (yellow box).

 This 3 min 3C chart shows the triangle that formed on the 12/13th and the break below the triangle on the 14th with a 3C positive divergence in to that break. It looks like we could get a little pullback on a negative divergence on today's chart, that may be worth keeping an eye on if you like the GOOG idea and didn't get in last week.

 The 60 min chart shows a leading positive position in 3C, which would suggest that GOOG has plenty of upside potential.

This 60 min Trend Channel isn't my favorite, but a daily is too wide for this trade, I would look for a pullback to the $565 area as a possible entry, we want to make sure 3C is positive in to any pullback before entering, but by the looks of the 60 min chart, I think it will be.

This is an excellent example of using technical traders' predictability and Wall Street's response to let the trade come to you.