GOOG Trade Set up

GOOG is interesting, it looks like it needs quite a bit of work to bounce, but maybe not. In any case, any bounce looks to be a golden gift like the broader market, selling/shorting in to price strength, not chasing weakness.

 This is GOOG's daily chart/ 50 day ma

The price action above the trendline/range is what I have been saying for months is a sort of blow-off top, major distribution area.

 You can always get a red flag warning just by watching the changing character of the stock, an accelerated uptrend "seems" bullish, but more often than not, it's a prelude to a top. The small bodied candlesticks and hanging men are a clear sign GOOG ran out of momentum and has formed its own little Channel Buster in which case, the break to the bottom is exactly what should happen after the breakout on the top.

Most times technical traders expect a kiss of the channel goodbye (bounce in to resistance at the channel), however more often than not that bounce will break in to the channel and shakeout the new positions, stops, etc.

 The Trend Channel is set perfectly to hold this last move and it stopped out last Friday. That means volatility is likely, but as far as holding GOOG long even on upside volatility, it's usually a losing proposition once the Trend Channel breaks, if anything you might get a few percent here or there, but have to sit through major volatility and a lot of opportunity cost.

 The 4 hour chart shows the heavy distribution at the range and even stronger above it, this is why I have been saying for months that this area is a sort of blow off or large head fake area, if you consider the entire trend form 2009, the head fake area would actually be quite small.

 60 min chart, look how fast this chart moved nearly straight down, that's a lot of movement for such a long chart, also that means it's a lot of distribution.

Don't only think of distribution as selling, it shows up as short selling as well, both transactions are a sale across the tape.

More to the point, the 30 min chart from confirmation to sharp distribution to a sharp fall.

If you look at price right now, it's hard to imagine a proportionate reversal process, perhaps it just flags or creates a "J" hook, but it should see some reversal process and bounce which makes entering or adding to a GOOG short very attractive on that bounce.

The 5 min chart did an excellent job of calling GOOG as well and it's showing a leading positive divegrence right now so I do think GOOG will behave like the broader market, bounce, sell short in to it and just let those positions keep working as we slide further down the right side of the mountain until the market just breaks.

I suppose I'd be looking for an entry around the $1155 level, although I always want to confirm with 3C, at least you have an idea of where to set price alerts.