March 3 - Google Trade Followup

Following the Google trade posted on February 12, the stock has been range bound between $520 and $550. The 50 day simple moving average is trending down at around $565 while the 200 day moving average is up trending and currently around $505. The price is moving towards a squeeze by both the moving averages from above and below.

The RSI is rising from over-sold and crossing the 50 mark which is bullish (in the short-term). The action on this stock has settled and the volatility has decreased as the 14 day Average True Range (ATR) is now down to around $10.


On February 12th we put in a trade to sell an amount of naked puts on Google at $450 level for $9 premium/share ($900 per contract). As of today's close, these contracts are trading at around $4.00 / share. This creates a paper profit of $5/share or $500 per contract. These are still unrealized profits as I intend to hold on to the positions a while longer.

If the price breaks above the current channel I will keep the contracts longer so I can buy them back cheaper for more profit, if we break the lower support of the channel, I may re-assess the position depending on timing.