January 7 - GOOG Trade

Here comes the Google trade I've been watching for. After a huge run up, yesterday the runaway trend to the upside tested the uptrend line with a $16 loss. This morning there was no steam for the upside and the price moved below the trend line, effectively signaling a potential break in the uptrend and a correction downward.


How deep this correction will be or if it will be sustained at all is hard to tell right now, but I have gotten myself into a short position by selling FEB 700 call contracts for $3.30/share. I will profit from 3 different scenarios: 1) If the stock moves down, 2) if the stock stays stable and in range, and 3) if the stock moves up slowly, but too slowly to reach $700/share by the third week of February.

I realize that Google's earnings will come out before that, so I will try to trade out of this before expiry if it goes against me.