Sunday, March 18, 2012

$GOOG chart and setup 19mar

for 19mar, comments below chart

after this weeks trading the setup is similar to previous week. Stock is trading in a channel for couple of weeks now, getting close to breaking out of top of the range. breaking out of the range would usually be a trigger for entry for me. for that example i would keep my credit put spreads below the bottom of the range near 600. but what will probably keep me out of a trade in near term is that google has earnings the thursday before opex last time i checked. As usual the volitility of the options will increase into an earnings date, that will negate any time decay that this spread is supposed to have. I want to get BOTH time decay and benefit from stock increase. The only setup i see that will get me to enter is a selloff, quick selloff preferred, down to the bottom of the channel near 600ish. I would like to get credit put spreads below the support line at 565ish, but definately below the 200day moving average near 578. This entry will be for a rebound in stock ahead of earnings, the presumption is that bottom of channel support holds and stock rebounds. If stock floats around here or breaks out upward it will do so without me. so i have an initial alert at 605 to get the trade on my radar.

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