Google earnings are scheduled for release after the US session close on Thursday, setting up potential trades for Friday. Google is expected to post Non-GAAP earnings of $10.67 per share, along with revenues of $14.04 billion. The high-end estimates are looking for earnings of $12.20 per share and revenues of $15.12 billion. Google has made a large run higher in recent weeks, so we will likely need to see earnings come in at the upper end of the projected range in order to sustain the rally.
The stock price recently broke to new all-time highs on increasing revenues, Youtube positioning growth, mobile app expansion and a generally positive tone in stocks. At 24.5 time earnings, the stock is trading above its 5-year valuation average (23.9 times earnings), so there is some scope for a large downside move if a negative result is seen. Rallies will be more difficult at this stage, and will likely need a larger positive surprise to trigger bullish trades.
On a technical basis, major support is seen at the 50% Fib retracement of the rally from 695, which now comes in at 769. A downside break of 769 will trigger signals for Daily PUT options. To the topside, the levels are less clear and will likely need to be revised into the Friday open. At the moment, historical resistance is seen at 796 and a clear break here can be used as a signal for daily CALL options in GOOG.
The price is now as low as 768. The 769 support is already broken. Do you think we have already conditions appropriate for put entries?
Thanks for the heads-up. RO is paying good attention to what is happening in the markets, and its helpful because sometimes we do have to get some sleep.
The answer is "no" because this section waits for fundamental drivers first, then looks at technical levels for exits and entries. Its actually an important notice because this changes the levels significantly and suggests that traders are starting to get bearish.
Here is my chart:
Enter into daily (or longer) PUTS in GOOG on a break below 730. Its gonna take a big push to get there, and there will probably be a reason for it.