Alphabet: GOOG Curious Case of the Unfilled Gap
Normally when Google beats earnings expectaions it tends to gap up and away for a couple of months or more and then,
eventually, momentum begins to wane and it comes back off to fill the gap. It's been that way for so many quarters now
and every gap has always been filled in the end - and notice when it does get filled that moment (that day, not minute as
with Bitcoin) presents the best buying opportunity you will find...every time....because it tells you in advance where the
low should be. Helpful if you're looking to build a long position in any FANG. Works every time. Except once. That red arrow
at 900 shows the one large gap here into new high ground that has never been filled. Friday's price action has led to a second
test of the last gap created during last earnings season. For those with a technical interest there is also a fabulous island
reversal showing at the very top of the rally with a tiny gap created to left of the red arrrow at 1160 followed by the
massive fracture which begins from the same level. The ensuing bear rampage takes price all the way back to that
same gap zone before it bounces again. Mind the Gaps. They are very interesting from a technical perspective and create
some great short term trading opportunities on the rare occasions when a stock like GOOG runs into a consolidation phase.
Having bounced from the gap zone GOOG has rallied to test the underside of the structure to its left at 1046-1050 and
come to a temporary halt at 1037. Nasdaq is likely to remain volatile next week, the environment we need to go out scalping
Maybe Goog can still make a getaway from the gap zone, just as it has always done in the recent past (bar1) - but if so it
still looks like it will need a retest to prove it. Whilst unable to move and hold up above 1046-1050 it's likely to retest
996-987 again. And if at any point on Monday 987 gives way it can be shorted back to 961. Then if this level in turn fails it
can be shortred a second (or third) time to 942 and most likely back to the lower parallels where it becomes a buy
again if struck with stops below for those who may have been waiting to buy Alphabet for the longer term. A 20% decline
would create a target at 948 and 21% at 937.
On the upside Goog has to move above 1050 and then hold up at 1037 on any retest to trigger a long but only if it holds up
well at 1037 and then moves up through 1050 with some volume behind it - then it can be followed up to 1080 but run
a stop up underneath it quite tight just in case it fails. The next near term long shot from here triggers from 1085 to 1120
and then from 1125 to the top of the gap at 1159.
As to the case of the unfilled gap...to fill the missing gap the parallel will have to be broken. Google likes to fill big gaps.
It's in its nature. It could happen eventually and if it breaks below 987 come Mondaythat will be the first signal that either
the parallel or the gap itself will become the final low. More as this move develops.
Normally when Google beats earnings expectaions it tends to gap up and away for a couple of months or more and then,
eventually, momentum begins to wane and it comes back off to fill the gap. It's been that way for so many quarters now
and every gap has always been filled in the end - and notice when it does get filled that moment (that day, not minute as
with Bitcoin) presents the best buying opportunity you will find...every time....because it tells you in advance where the
low should be. Helpful if you're looking to build a long position in any FANG. Works every time. Except once. That red arrow
at 900 shows the one large gap here into new high ground that has never been filled. Friday's price action has led to a second
test of the last gap created during last earnings season. For those with a technical interest there is also a fabulous island
reversal showing at the very top of the rally with a tiny gap created to left of the red arrrow at 1160 followed by the
massive fracture which begins from the same level. The ensuing bear rampage takes price all the way back to that
same gap zone before it bounces again. Mind the Gaps. They are very interesting from a technical perspective and create
some great short term trading opportunities on the rare occasions when a stock like GOOG runs into a consolidation phase.
Having bounced from the gap zone GOOG has rallied to test the underside of the structure to its left at 1046-1050 and
come to a temporary halt at 1037. Nasdaq is likely to remain volatile next week, the environment we need to go out scalping
Maybe Goog can still make a getaway from the gap zone, just as it has always done in the recent past (bar1) - but if so it
still looks like it will need a retest to prove it. Whilst unable to move and hold up above 1046-1050 it's likely to retest
996-987 again. And if at any point on Monday 987 gives way it can be shorted back to 961. Then if this level in turn fails it
can be shortred a second (or third) time to 942 and most likely back to the lower parallels where it becomes a buy
again if struck with stops below for those who may have been waiting to buy Alphabet for the longer term. A 20% decline
would create a target at 948 and 21% at 937.
On the upside Goog has to move above 1050 and then hold up at 1037 on any retest to trigger a long but only if it holds up
well at 1037 and then moves up through 1050 with some volume behind it - then it can be followed up to 1080 but run
a stop up underneath it quite tight just in case it fails. The next near term long shot from here triggers from 1085 to 1120
and then from 1125 to the top of the gap at 1159.
As to the case of the unfilled gap...to fill the missing gap the parallel will have to be broken. Google likes to fill big gaps.
It's in its nature. It could happen eventually and if it breaks below 987 come Mondaythat will be the first signal that either
the parallel or the gap itself will become the final low. More as this move develops.