GOOGL Technicals Pointing Towards a Sell-Off

August 15, 2016

Jeff Bierman joins TheoTrade today. Jeff brings his extensive background in fundamental and technical analysis to TheoTrade. He spent 8 years at thinkorswim and then TD Ameritrade. With Jeff's help TheoTraders are setting up a bearish put spread in GOOGL. TheoTraders are now able to combine probabilities and technicals to create high probability trade ideas like this one...

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Phil Sartin
August 15, 2016

Don, Why would you consider RSI when, historically, at this level, (according to the charts you displayed) it did not show a change of trend? Or, is it that having three oscillator indicators in concurrence the significant point? Not being critical, just trying to understand. Thanks! -- Phil
TDV
August 16, 2016

How are you a trader that does not look at technicals?? WTH

how does that work
- Duncan
  August 18, 2016
  
  TDV .. .I;m gonna defend Don a little and he does not need it from me and Don does not know me from nothing .. BUT ... Go look .. if you would .. at these .. there are basically 3 types of analysis .
  Technical - charts
  Fundamentals - Companies financial statements
  Statistical - IE the Math / Options Model IE Black Scholes model .
  
  Some use only one .. some use a combination of all 3 .
  thanks
  Duncan Adams
Michael Thompson
August 16, 2016

Interesting trade and may very well work out well based on the overall market being oversold and somewhat "frothy". That said, GOOGL's price/volume action are by far its most supportive technicals. Granted, I didn't see your video until after the close today, but the current pull back has been in light volume and if I were a holder of the stock (which I'm not) I wouldn't be selling at this top. I would prefer to see true divergences in some of the technical indicators you mentioned prior to looking for a true "roll over". Who knows, I quit trying to predict the future...
I suspect any move down will be brief so your suggestion to have a clear and decisive profit target, as always, is crucial.

I would prefer to use the "in out bear put spread" for stocks trying to rebound in a downtrend, perhaps after recently breaking down trough the 50DMA (?).

Anyway, thanks for the heads up and enjoyed the exercise!

Mike