Google

We hold four nearly riskless March 840-850-860 butterflies for a 0.20 debit each.  This position could pay off at 50-to-1 odds or better if the stock continues along the upward trajectory it has maintained since before Thanksgiving. A crucial test of its ability to do so is near, however, in the form of the 792.85 Hidden Pivot target shown in the chart.  The stock has traded slightly above it Monday evening, hitting 793.26, but it'll need a little more loft to conquer the target decisively.

With little anxiety, we hold four March 840-850-860 butterflies for a 0.20 debit each.  This bull spread will work nicely with our short position in Goldman, since, although the March 145 GS puts we bought on Friday will subject us to no more than about $200 of theoretical risk if the stock continues to rise, we stand to make as much as $4000 if GOOG goes higher too.  Moreover, the most we can lose on the GOOG position is about $80 plus commissions.  Since GOOG and Goldman are both being driven by the same bunch of institutional lunatics and imbeciles, it seems well-nigh impossible that the two will go in opposite directions.  I've reproduced a chart that shows how GOOG, driven nuts by Other People's Money, is easily the equal of GS in terms of feistiness, exuberance and obliviousness to the real world.

I am recommending the purchase of the March 840-850-860 call butterfly for a 0.10 debit or better.  Ideally, you would want first to short two March 850s for a current 0.45 apiece; then, to immediately buy one March 840 call for 0.60.  That would give you a 1:2 vertical spread for a 0.30 credit, reduced by whatever you pay for a single March 860 call (currently offered for 0.30) to complete the position.  This is a low-cost, low-risk play on the very bullish, 848.29 target I flagged in GOOG a while back.  The impetus for the trade came from a question asked during this morning's weekly tutorial session for webinar grads. Please report any fills in the chat room so that I can establish a tracking position for your further guidance. _______ UPDATE (7:00 p.m. EST): Chat-roomers pursued this opportunity so diligently that I am going to track it even though no one seems to have bought the spread for the suggested 0.10.  Most reported fills for less than 0.20, so our tracking position will record four @ 0.20.  Theoretical risk on this one is about $40, commissions included, but it could produce a profit of as much as $4000 if GOOG rallies a measly 15% between now and mid-March, when the calls expire.  For now, do nothing further.

Although I'd initially said a two-day close above the 742.15 midpoint resistance of the pattern shown would make a follow-through to D=848.29 a good bet, I now see that it is the weekly chart that was featured, and that a two-week close above p is therefore needed to carry the day for bulls.  Regardless, a buy signal has been tripped for 'camo' traders, even if it is unusable at the moment because the still uncorrected uptrend is just too steep.  Any interval of tedium plotted on the 15-minute chart or less could yield the entry opportunity we're looking for, so stay with it if you're interested (and by all means please give me a nudge in the chat room if you see something that you think could work).  Click here to learn how you can do these tricks yourself.

Google has $19 of running room before it reaches the 742.15 midpoint resistance of the pattern shown. That can serve as our minimum upside target for now as well as a rationale for getting long via camouflage.  I'd suggest using a 15-minute chart or less to identify an opportune pattern, but making entry on a chart of even lesser degree.  You could also try to short the midpoint, but keep in mind that any significant progress above it would augur more upside to its 'D' sibling at 848.29.  _______ UPDATE (January 7, 1:23 a.m. EST): Google has rallied $18, peaking just 68 cents from the 742.15 target flagged above.  We'll stipulate that the stock close above it for two consecutive days before we infer that a follow-through to 848.29 is nigh

Google apexed yesterday a mere 39 cents above a 728.71 target easily identified on the hourly chart (see inset).  That could be it for now, but if the stock moves still higher on Wednesday, the 734.60 target shown, which uses the next-lower point A, is a logical place to expect a short-term top.  It would be tradable, of course, but I'll leave it to you camouflageurs and Pivoteers to figure a way to board if the opportunity should arise. ________ UPDATE (December 24, 11:20 a.m. EST):  Buyers have found traction this morning 11 cents from the 707.49 target of the pattern shown.  This Hidden Pivot was surely tradable, but if it's breached even slightly expect the weakness to continue down to at least 703.80, a target that fulfills the lower B-C pairing.

Google pulled back yesterday after achieving a high at 705.89 that easily exceeded the 700.00 target I'd advertised when the stock was $30 lower.  This was a precise Hidden Pivot, and so the overshoot will have bullish implications going forward.  The chart shows how things might play out in order to generate a bullish 'x' entry signal.  If and when it comes -- and this seems very likely, given the decisive nature of the impulse leg -- 'camo' traders will want to be looking for their entry opportunity on the 3-minute chart.  ______ UPDATE (December 10, 2:17 a.m. EST):  The trade set-up detailed earlier has produced an entry signal at 694.30 (see refreshed chart), but the subsequent 12-point decline makes clear why we should always look for opportunities on the one-minute chart rather than the "daily" when trading a $700 stock. GOOG will remain on a bull signal nonetheless, unless the point 'C' low at 682.33 is exceeded to the downside. Please note, however, that the 'external' peak one might have used to get long via camouflage on Friday has been spent. It lies at 684.52 (3:08 p.m. EST), and the A-B impulse leg that exceeded it produced a winning trade with two single-bar coordinates. _______ UPDATE (December 11, 2:26 a.m. EST):  With no 'camo' handholds to be found even on the 15-minute chart, we'll sit back and enjoy the show for the moment.  However, if GOOG falls hard today, the 673.00 downside target shown in the refreshed chart can serve as a minimum price objective as well as a place to attempt bottom-fishing with a tight stop or 'camouflage'.

Hidden Pivots aside, an un-schooled look at the chart (inset) will tell you this stock is ready to rip. The target of the pattern shown is 700.00, and there'll be no stopping the rampage if and when GOOG pushes past the 679.00 midpoint resistance. We dabbled with camouflage in the final hour of yesterday's session, attempting to get long with very limited risk, but the trade was stopped out after the first profit-taking interval at p of a one-minute pattern. We'll keep trying, since I am eager myself to learn how to best trade it -- whether via weekly options, or using raw stock. If a fetching opportunity should arise, I'll signal it first in the chat room, and then, if there's time, via 'E-Mail Notifications'  (a setting available on your 'My Account' page). 

We recently logged a theoretical gain of $3000 in this stock by catching a tradable low very precisely and riding it until an exit was signaled using an impulse-leg stop-loss. Let's try to do it again using the pattern shown. I'll signal when to buy if an enticing entry opportunity presents itself following an impulsive thrust on the hourly chart.  I prefer trading shares rather than options in this case because spread-trading puts and calls on a $600 stock is much hairier than simply buying the stock outright with a penny-ante stop-loss.  If you want to receive trading alerts in real time, be sure to check 'E-Mail Notifications' on your 'My Account' page.  It’s easier than you might imagine to out-forecast gurus who do it for a living. Click here for a free trial subscription that can start you on the road to making your own trading and investment decisions.