GOOG – Google (Last:495.86)

Google (GOOG) price chart with targetsThe stock looks primed to fall to at least 478.88, a Hidden Pivot, although the obviousness of a structural support at 473.02 from a key low made in late June could give us an edge for bottom-fishing.  Most traders will be looking for a bullish turn from somewhere above 473, but the Hidden Pivot at 478.88 gives us a more precise tool for speculating on this.  Accordingly, I’ll suggest buying two November 560 calls if and when the stock gets within 40 cents of the target. Thereafter, a stop-loss at 477.88 can be used until the stock turns around.  It’s difficult to say exactly how much the calls, which closed yesterday at 11.50, will be selling for with the stock at or near our price. My guess would be as low as $7, but probably not less than that because the calls could pick up volatility (aka “juice”) on a sharp break lower in the stock.  Assuming your execution is smooth, the stop-loss I’ve advised should subject you to risk, in theory, of no more than about 40 cents per contract. _____ UPDATE (October 5): The low of this week’s swoon came within less than $2 of our 478.88 target, but because of the magnitude of the hysterical short-squeeze that followed, we’ll set aside any thoughts of bottom-fishing as we’d originally planned. In the end, it was not the Hidden Pivot that turned the stock, but the mob’s expectations that June 24’s low at 473.02 would act as support.  Because the support is so obvious, it seems all but certain that GOOG will test it.