Here’s your trade on $GOOGL – May 19, 2023


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This is Dan Fitzpatrick at and too, by the way. I want to look at Google ( NASDAQ: GOOGL ) today. At Stock Market Mentor we have been in this stock for a while and it should be obvious where and why here.

Let’s talk about the whole AI thing for a minute, we have got to start with the weekly chart. Google ( NASDAQ: GOOGL ) had been one of those stocks, one of the mega-cap stocks that hadn’t really been doing very well, not like Microsoft ( NASDAQ: MSFT ) and NVIDIA ( NASDAQ: NVDA ), even Apple ( NASDAQ: AAPL ), but the stock really turned around.

That kind of made sense when you consider that there is a big theme towards, I don’t know what the FED is doing, I don’t know what’s going on. But I will tell you this, the mega-cap stocks don’t need the money, so let’s just go there.

We don’t know where all the bodies are buried, but we know they are not buried at Tesla ( NASDAQ: TSLA ) and Amazon ( NASDAQ: AMZN ), Apple ( NASDAQ: AAPL ), and Google ( NASDAQ: GOOGL ), NVIDIA ( NASDAQ: NVDA ), we know that stuff is solid.

Google ( NASDAQ: GOOGL ) though, had actually kind of been lagging behind some of the others. But then, it turns out that all of a sudden, people realized that these guys had a real AI play. By the way, a few comments on that, you could say Google ( NASDAQ: GOOGL ) was late to the party on this. Well, you could say Bill Gates was late to the Internet on that because they didn’t do anything back then.

This is a little bit different. The issue here is, Google ( NASDAQ: GOOGL ) had ( I should say Alphabet ( NASDAQ: GOOGL ), but Google ( NASDAQ: GOOGL ) has a pretty established brand, they’ve been around for a long time. And so, if they came out with an AI product and it didn’t work very well, it was a “failure’, that would have definitely hurt their brand, their whole brand, because they are “Search”, right?

And so they had to do some brand protection. And the way they did that is, to step back, work on their stuff, and not really say too much. Knowing that they are going to be giving away the first-to-market position to somebody else who doesn’t have as much to lose. And I would say that is really what happened.

Now, Google ( NASDAQ: GOOGL ) is in the mix and people are realizing that this gives them a real big advantage over their competitors. And that is one of the reasons why the stock ran up. There are like 98 bazillion people that know more about this than I do, I just told you what I know.

I do know charts and I know this, this stock was really consolidating in narrowing highs and lows. And then it broke out here, at least on my chart it did, but then it pulled back, I thought, Oh crap, this is a false breakout and so I actually got shaken out and had to buy it the next day at a higher price when I saw the stock was continuing to run.

I initially had, what I would say, was a really good entry but I just got shaken out. Because I don’t believe there is such a thing as a “wussie” in trading. I think you are just a risk manager and I didn’t like what I saw, so I got out. I’m not perfect, I’m not the world’s best trader, but I don’t lose money. Now, we are back in. The stock is continuing to run but on a very short-term basis.

On a short-term trading basis, you have got to look at these Bollinger Bands because they will really tell you more than you might, otherwise, realize. When you see the band, where the price is going, you see it just continuing to expand.

And this also continues to expand because the bands have to be, they’re two standard deviations away from the 20-day moving average here. And at any given time the bands have to be equidistant from this 20-day moving average. If this is 15 percent above this, this is going to be 15 percent below.

And the reason they widen so much is that the move happens so fast that this 50-day moving average, instead of doing this, is instead, doing this. So it is running right along with the upper Bollinger Bands.

So after a certain amount of time, what happens? After a certain amount of time what happens is, the opposite band starts to hook up and starts to make a run. And it just so happens, that when that happens it is a really good indication that the run is, at least, pausing. Because that is really what causes the bands to start pulling in a bit.

So what I am saying is, on a real short-term chart, this has been one heck of a trade. On a short-term basis, I think you have got to take profits. But then you zoom out and you look at this, and to me, it is only a matter of time before this comes up to this last high in 2021. I don’t see how this can not do that.

However, I do think that it won’t do this, I think it is going to chop around a lot. But then finally, we are going to get up there. So you need to make a decision in your own trading. Are you trading on a short-term basis where you are swing trading? If you are, then now is the time to be booking some profits, in probably all of your position, as a swing trader.

But if you are more of an investor, I sure wouldn’t be buying more here. But you have got to understand that you are going to get some wiggles and jiggles. And therefore, you just have to accept it, or become a short-term trader and ditch it all.

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