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Friday, October 19, 2012

Wolf on Wall Street's Take on GOOG, posted WEDNESDAY!!!

I think you might find this
Wolf on Wall Street
GOOG Update/Analysis interesting, it was posted Wednesday October 17th at 3:24 p.m.

Wednesday, October 17, 2012

GOOG Analysis/Update

GOOG is currently a core short position that is about 2/3rds the size I'd like it to be, GOOG does report after the bell tomorrow, right now I don't see any earnings leaks in it as we have caught in the past in GOOG, but I'd remind you we caught that leak at 3:45, 15 minutes before the close and their report.

In any case, here's what we have...

 GOOG's most recent run is actually parabolic, it just broke below the channel and will likely break above the channel before it's all said and done, but the parabolic move up in 2012 is not a good sign for GOOG's long term trend.

 Former GOOG parabolic moves on a 5 day chart that show they end badly, they also reverse faster than most reversal processes.

 As for the Trend Channel and the parabolic 2012 move, the Channel called a stop on the trade about 7 days ago, so something has changed in GOOG's character for the worse recently. If you were playing the trend trade here, it would be advisable to exit the trade here and not scrap for the few percentage points of very volatile trade after a Trend Channel stop, for the rest of us, we are looking for the opportunity here.

 This doesn't appear to be a H&S top as volume is totally wrong, but it is lateral trade rather than a clean uptrend, it's a change in character which leads to changes in trends.

 The Daily MoneyStream is not only locally negatively divergent, but on a longer timeframe as well, the embedded Stochastics (I think they are a measure of strength) are starting to come undone.

 The daily 3C chart agrees with Money Stream, it seems GOOG has been under distribution, for a stock this big and institutional positions as large as they are, I can see this taking a while and the signals don't surprise me.

 The 4 hour chart also shows something changed for the worse with a leading negative.

 The 30 min chart changed as well from confirmation to a leading negative and wouldn't you just guess it, right in the flattest area of GOOG trade pretty much all year, right where we normally see it.

 Recently like much of the market, the short term intraday charts are going negative

 The 5 min chart is as well and it actually looks pretty bad, but it's not that far from the market so I can't say this is earnings related.

 The 10 min chart, like much of the market also suggests GOOG has more near term upside.

 Here's the SPY 5 min chart for comparison.

I'll continue to hold GOOG short and look for an opportunity to add, we'll watch close tomorrow for an earnings trade, but for now, I think it's right in sync with broad market action.

Brandt Uses Worden's TeleChart and StockFinder 5 Exclusively

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