A Trade in Mighty GOOG - Google Inc.

It’s been a while since I’ve traded Google Inc, - GOOG. It’s quite expensive, and the daily ranges have not really interested me. With earnings last night for GOOG, that changed the trading action for today.

Last night after earnings, if you blinked, shares in GOOG were changing at 10 point strides. I decided to watch it close today. Google’s stock put in a double top with highs in November and January. GOOG has had a difficult time regaining the recent high of January, and was finding resistance around the 505 area. Lower highs and lower lows are what I look for when shorting a stock.

My 15-minute chart isn’t showing the data for GOOG, so I’ll use the 13-minute candlestick chart instead for illustrating this online trade.

I’m not into scalping a stock like GOOG. Watching the 15-minute chart cut out plenty of the noise, and set up a pattern I frequently trade. Both the 20 and 50 dma’s were trending down. When the shares bounced, and got near the 20 moving average, I waited for a lower low to short the stock. A stop is placed above the previous bar, or the high of the day based on your risk tolerance and time frame for the trade. The action was fluid, and called for a tight stop for this GOOG trade. Lower highs and lows the rest of the day. When a stock is trading so fluid, I’ll usually set pivot stops. Once it breaks a lower pivot, the stop moves lower, and targets are exited when reached.