Here’s how that Alphabet (GOOGL) trade worked (or didn’t work)…and what to do tomorrow. (April 30, 2019)
GOOGL
Google ( NASDAQ: GOOGL) reported earnings and they sucked. There is no other way to say it, Google ( NASDAQ: GOOGL) that. I had mentioned last night that we could have a potential trade here on Google ( NASDAQ: GOOGL). That really didn’t transpire so much today.
This is what happened, the stock gapped down here and it just never really got going one way or another. I can draw a box around the opening 5-minutes or so; stretch that all the way across and this is where the stock traded. It really traded within the opening rotation range all day long. If you were trying to trade this today you probably got chopped up; you bought it here, you then you got stopped out here, and then you are waiting and you bought it here. You get the point. It basically was just a crappy stock to be trading today but that doesn’t mean it’s going to be that way tomorrow.
Here’s what I am talking about: The stock traded down quite a bit closing right around $1,200.00, which was really kind of the line in the sand for me. I wanted to see the stock run back up above $1,200.00 today; it did for about 5-seconds and then it came back down. Look at this massive volume. When we go back and look at the intraday here. This is what I want you to think of when you see this think of supply. This is just massive selling, selling all day long. I was watching the volume weighted average price on the stock, we’ll go 15-minutes here, that’s the price at which, if you are buying the stock you want to get as close to it as possible, maybe even below.
If you are selling the stock you want to get as close to it as possible, maybe even above. And so you can see that the stock really traded so sideways all day long that the VWAP actually looks like a trendline here. What that tells you is, that there is an equal amount of aggressiveness between sellers and buyers. That’s not going to go on for very long, typically it doesn’t even go on for a day, it really doesn’t.
Somebody is going to give and my bet is the supply is going to get exhausted before the demand does and we will see the stock run-up probably tomorrow. If not tomorrow then Thursday. Again, I’ll say it because I always do, I don’t have a crystal ball I’m just doing the best I can and so please don’t think that I am trying to make some big market call because I’m not. I am just applying what I know with respect to potential energy, meaning excess supply and excess demand, potential energy and then the move in a stock. That’s really what we are doing here.
So this is really the trade: Wait for the stock to trade above 1,202.00, wait for it to trade above 1,202.00. You can set a 2 percent stop on your stock trade and you are probably going to make some decent money on that. Because, again, I just think that as long as the stock goes up to 1,202.00 what that is telling you is all this supply here that kept the stock down below 1,202.00 is gone. Now, if anybody wants to buy the stock they are going to have to go above 1,202.00, which they didn’t have to today so that is different; right?
The setup is the big sell-off here and a rebound off the 50-day moving average that is the setup. The trigger is a move above 1,202.00, you can go 1,201.00 if you want but what we are really talking is pennies here. So that’s the trigger, a move above 1,202.00. And then a confirmation, frankly, is when the stock just continues to move up and you don’t get stopped out. That is your trade here on Google ( NASDAQ: GOOGL) for tomorrow. I think it will be a good trade, I think it is just a day late. Hopefully, it isn’t going to be a dollar short.
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