Google

GOOG has been struggling for altitude lately, unable to muster the potential last-gasp rally it would take to achieve a Hidden Pivot target at 607.28.  The butterfly spread advised from lower levels is nicely profitable now, but it may have entailed too much work to engage the interest of subscribers.  Here's an easy one, though: If the stock hits 607.00, get short by buying a single January 570 put. It should be selling for less than $5, but it will be easier to be scientific about it by monitoring the option bid/asked spread when the stock gets within a buck or so of the target.

I didn't hear from any subscribers who butterflied the 610 strike as I'd recommended, but it sill looks like the stock could top out near that price. Specifically, there is a Hidden Pivot target at 607.28 where we could attempt to get short with relatively little risk. I may be able to advise a price for any put options we might buy if and when the target is reached, but for now I'll make it catch-as-catch-can, stop 607.41.

I think Google will hit 607.28 by December expiration. A relatively low-risk way to play the move would be to buy the 600-610-620 butterfly for a debit of between 0.50 and 1.00.  You would start by shorting two December 610 calls on the offer, then buying a 600 call and a 620 for about 0.50 to 1.00 more than you received in premium for the two Dec 610s. The position could widen to as much as $10 (i.e., $1000 per butterfly) if the stock is trading for 610 at expiration.  We'll work on this one for a while, but you should try to get a feel for how the three option series trade against each other as the stock moves up and down.  If you're able to fill the order, please let me know in the chat room so that I can establish a tracking position for your further guidance.

We already know that Google at its very feistiest is not capable of taking Goldman's place as a market leader. However, when the web-search purveyor is moving higher, it does lend some buoyancy to the broad averages, and when this effect is sustained for a few days, it can cause short-squeeze forces to build. With that in mind, I'll note that GOOG's so far impotent rally would become meaningful to the short-term outlook if the stock can muster the modest push to 539.60 needed to create a bullish impulse leg on the intraday charts.

Those of you who were nimble and daring enough to have gotten off a short just above my 553.87 target last Friday should set a hair-trigger stop-loss, since GOOG looks like it's a-comin' to git ya. The stock could hit 568.18 on the next maniacal leap.  The sibling midpoint of that Hidden Pivot is 554.44, just beneath the 554.75 high. My hunch is that if the stock can better the pivot, the peak itself won't put up much of a fight. ______ UPDATE: GOOG exploded for a quick $8 points, topping at 559.35 before detumescing on the stock market's final-hour selloff.  If you were short coming in and dodged the bullet, treat yourself to a good cigar.

Google is closing fast on a 553.87 target first broached here in July when the stock was trading 25 percent lower at 442. There are other compelling targets near there as well, but we'll need to settle on one, as we have,  in order to play.  Getting short painlessly with put options is going to require some finesse, so my plan calls for initiating the trade via an  intraday signal in the chat room. (The alert will be posted as an update to the tout as well, in real time.)  If you want to try this one yourself, I'd suggest using an initial stop-loss of at least 30 cents, but no more than 40 cents. _____ UPDATE (12:33 a.m.): The target briefly and very precisely contained Google's $25 rampage, but the stock got second-wind and 30 minutes later stopped us out of a Dec 500 put purchased for 5.90 for a loss of $10 (or perhaps $19 if you used a market stop).  The high so far today has been 554.75. If it proves to be the top, or at least "a" top, we'll factor that into our next targeted trade in the stock.  The recommendation was predicated on accuracy to within 30 cents, but the pattern we used to target Google had taken six weeks to play out, so perhaps I should have allowed a bit more leeway.

With a rally target at _____, the little arse bandit hasn't given us much in the way of Hidden Pivots to bottom-fish. Nevertheless, we can attempt it this morning if the stock pulls back to _____ in the first 15 minutes, bringing the December 550 calls (GOPLY) into bargain range.  You should try to buy one of them for around _____, using a stop-loss at _____.  With the stock in such a strong rally, it will probably be easier to try and enter with-the-trend on camouflage; so if you are familiar with the technique, you should try to buy the call on the first ABC rally from near _____.

Google is too hot right now for us to play catch-up, but because we have a score to settle, we'll be looking for any opportunity we can find to plunder the unwary.  The stock appears bound for -----, opening up the possibility of our buying cheap vertical spreads near the 550 strike.  The December spreads sell for a little more than three bucks, but we'll want to pay no more than $1.50 or so. That will require legging into the spread, buy side first. Stay tuned, since the trade must be attempted when the stock is falling toward a Hidden Pivot retracement target.

During an impromptu webinar yesterday, we calculated that our $13 strangle will have recouped about half its value if the stock reaches a 475 target that looks like a decent bet. Even so, bid/asked spreads were too wide on way-out-of-the-money September calls for me to recommend buying them, at least right now. _______ UPDATE:  We'll book a $1300 loss on the strangle, which will go down as the worst trade Rick's Picks has recommended in the 12-year history of the service.  Google has no special ability to fool us, so we'll be looking to recoup every dime of that loss in the next round. Stay tuned!