Time to Google “Steve Miller Trade” on Google (GOOGL) (March 04, 2015)
I’m looking at Google ( NASDAQ:GOOGL ) here; the market was actually kind of weak today. You’ll notice Google ( NASDAQ:GOOGL ) was essentially flat. That’s a good thing right? Well sure it’s a good thing. You look at the weekly chart, it looks to me like Google ( NASDAQ:GOOGL ) hit a bottom right here at $500.00. Unfortunately at 578.00 we don’t get to go back and buy that bottom.
Unfortunately now we’re in this camp where we’ve got to be focusing on resistance as opposed to the bounce area down here. And so I’m looking at about $600.00 as the resistance area here; $600.00, we’re at 578.00 so just drag this up here. Yippee! We’ve got another 4 percent or so to go before you really have to start looking at this resistance level.
My suggestion is this, and we’ve got a trade going on this over on Option Market Mentor and I’ll be telling them this in a while, you need to raise your stops now. You can go ahead ad get out if you want. By the way, if it’s a long-term hold, bless your heart, you’ve been holding this thing for the better part of a year waiting for the breakout, and so hopefully that’s going to happen soon; but hope isn’t a method.
So what I’m suggesting is definitely don’t be buying here, there’s just not enough upside in it. And if you’re long, if you bought the breakout, just ride this puppy up with some stops. By the way you don’t have to sell all at once just like you don’t have to buy all at once. But what you want to keep in mind, and this is just a general rule of trading that I tend to violate sometimes, always to my detriment; you need to look at where the good buy point is here, it’s intuitively obvious here but sometimes it just has to be said. The further away the stock is from that buy point, the worse and worse it is that you’re buying.
And so it’s great to buy here at 530.00 you see the bounce, even here on a little breakout, you can buy here. Well as the stock moves up, it’s up 3.5 percent. Great! Now it’s up 6 percent, 7, 8, 9 percent. Are you still going to be buying right now? Really? Are you really going to be buying now? Answer, no.
And so if you’re not buying, just typical you are like every man, you’re every trader. If you are not buying because the stock has gone up so high away from the last buy point then, what are you doing? You’re probably selling. So my question to you is, why are you even considering buying now?
What you should be doing is either deciding to hold with a tighter stop or just taking some profits. Take the money and run, do the Steve Miller trade, it’s more than a good song it’s actually a good trading philosophy.
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