GOOG (Google Inc.)
Google has been a hard name for me to trade. Pictured is a weekly chart since the IPO in mid 2004. 
The advance has been incredible and the company is one of the most innovative growth stories in business. Last summer I got suckered into making a short bet on the stock when the overall market stumbled and GOOG was having a hard time staying above it's 50 and 200 day averages. I was quickly proven wrong and as the stock turned to make a new high in an advancing market, It made sense to be on board.
Jan 25, 2007
Today was a pretty nasty distribution day for NYSE names. The NASDAQ escaped the technical
distribution day because the volume came in below yesterday, but the index still sold off over 1.25%. I'm not quite ready to sell everything and short the world but i think this may be a critical turning point in the market. As such, i am methodically working on reducing exposure to protect my capital. Today I sold calls against half of my GOOG position receiving $26.40 for the Feb
480 calls. This is a pretty good yeild to call return if the stock is called away, and if not, the calls give me some downside protection.
Feb 2, 2007
Google reported earnings the evening of the 31st and so of course the first day in february was pretty volatile. The earnings announcement was strong with EPS at 3.18 versus 1.54 last year or a 106% increase. Sales were similarly positioned with a 67% increase. The stock traded both above and below the previous day close but by the end of the day it finished at the low end of the range down 19.75 for the day. This is not a deal killer although i am glad that I had some of my exposure hedged. The next frew days will be important as managers analyze the numbers and analyst put out reports but for now i am content to continue holding the position.
The stock sold off before expiration so the calls were not assigned and i gained the full premium. After finding support around 460, the stock rallied but not on strong volume. This was a bit concerning to me and I'm also concerned that the overall market may be nearing a pullback if not a general decline. I went ahead and sold the stock out yesterday for a very small loss (roughly a wash) and am traveling lighter in my portfolio these days.
The advance has been incredible and the company is one of the most innovative growth stories in business. Last summer I got suckered into making a short bet on the stock when the overall market stumbled and GOOG was having a hard time staying above it's 50 and 200 day averages. I was quickly proven wrong and as the stock turned to make a new high in an advancing market, It made sense to be on board.I took my long position November 15th. The timing was a few weeks after the Q3 EPS announcement that drove the stock up so quickly mid October. The stock had consolidated the move and then made a new high on stronger volume and appeared ready to continue its stellar run. I purchased 500 shares (or about 3% of my capital) at 497.65 and was pleased that the next few days saw higher prices as GOOG pushed to a new high above 510 within a week.
Since then the stock has pulled back and dropped below the 50 day average. Looking at the overall long-term pattern, this does not appear to be an abnormal retracement and fundamentally the stock continues to appear healthy 
with new products and other announcements being met with excitement. The relative strength line is becoming more concerning as it failed to pass the high from the January spike so it may be that I entered at the wrong time. I am watching the 450 level carefully as i will have a 10% loss below that level and will need to close my position out of discipline. However, I believe that if the overall market is strong early in 2007, GOOG will continue to be a leader and will be a name I would wish to have a position in so for now I feel the need to be disciplined about holding it until the stop point is hit or the fundamentals change.
Jan 12, 2007
Google has fought back from its normal correction and finally brought my original purchase back into black ink. There seems less risk in the stock now that some of the weaker holders have been shaken out and the subsequent rise has been in strong volume. I added another 300 shares just below $500 which now puts me at a full 5% position. The number of shares (800) is one of the smallest positions in my account but this mamoth stock price makes it a large holding.
with new products and other announcements being met with excitement. The relative strength line is becoming more concerning as it failed to pass the high from the January spike so it may be that I entered at the wrong time. I am watching the 450 level carefully as i will have a 10% loss below that level and will need to close my position out of discipline. However, I believe that if the overall market is strong early in 2007, GOOG will continue to be a leader and will be a name I would wish to have a position in so for now I feel the need to be disciplined about holding it until the stop point is hit or the fundamentals change.Jan 12, 2007
Google has fought back from its normal correction and finally brought my original purchase back into black ink. There seems less risk in the stock now that some of the weaker holders have been shaken out and the subsequent rise has been in strong volume. I added another 300 shares just below $500 which now puts me at a full 5% position. The number of shares (800) is one of the smallest positions in my account but this mamoth stock price makes it a large holding.
Jan 25, 2007
Today was a pretty nasty distribution day for NYSE names. The NASDAQ escaped the technical
distribution day because the volume came in below yesterday, but the index still sold off over 1.25%. I'm not quite ready to sell everything and short the world but i think this may be a critical turning point in the market. As such, i am methodically working on reducing exposure to protect my capital. Today I sold calls against half of my GOOG position receiving $26.40 for the Feb480 calls. This is a pretty good yeild to call return if the stock is called away, and if not, the calls give me some downside protection.
Feb 2, 2007
Google reported earnings the evening of the 31st and so of course the first day in february was pretty volatile. The earnings announcement was strong with EPS at 3.18 versus 1.54 last year or a 106% increase. Sales were similarly positioned with a 67% increase. The stock traded both above and below the previous day close but by the end of the day it finished at the low end of the range down 19.75 for the day. This is not a deal killer although i am glad that I had some of my exposure hedged. The next frew days will be important as managers analyze the numbers and analyst put out reports but for now i am content to continue holding the position.
Feb 23, 2007
The stock sold off before expiration so the calls were not assigned and i gained the full premium. After finding support around 460, the stock rallied but not on strong volume. This was a bit concerning to me and I'm also concerned that the overall market may be nearing a pullback if not a general decline. I went ahead and sold the stock out yesterday for a very small loss (roughly a wash) and am traveling lighter in my portfolio these days.
1 comment:
Good for people to know.
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