GOOGLE has been falling on the stock market since late yesterday, after presenting its results with the market already closed. Google's parent company achieved a historic profit of more than 100 billion dollars and revenues for the entire year of 350 billion. However, its shares are dyed red in the pre-opening.
--> What is the reason for the fall?
One possible cause would be that the fourth quarter revenues did not reach what was expected, which see in these numbers a sign that Google's parent company was being affected by the increase in competition in the digital advertising market and the slowdown of its cloud computing business.
A second reason is that Google surpassed historic highs days ago and it could be a MANIPULATION and PROFIT-TAKING movement by some FUNDS taking advantage of the volatility of the value to present results. In any case, the results ARE GOOD and the TECHNICAL ASPECT is good, so if nothing strange happens, the trend in Google will continue to be bullish.
--> What technical aspect does it have now after the -7% fall?
If we look at the graph, the technical aspect is still clearly bullish (Bull). In addition, it did not lose any of its main supports, so we will continue to think about long positions.
--> When could we enter?
The table shown in the graph indicates that the MOMENTUM in H1, H4 and DAILY time frames is bearish (Bear) and also the STRENGTH in H1 is bearish (Bear). Therefore, to ensure that the pullback has ended, we have to wait for at least in H4 the MOMENTUM to turn bullish (Bull) again. And when could this happen? When the price exceeds the 198 zone, it is very likely that the IVO indicator will already show us bullish MOMENTUM ( Bull ).
(If it happens before, I will update the analysis to anticipate the entry).
--> What important support does Google have?
The 184 zone is a very important support zone that, if not respected, we could see a much deeper retracement phase.
-------------------------------------
Strategy to follow:
ENTRY: We will open 2 long positions if the H4 candle closes above 198.
POSITION 1 ( TP1 ): We close the first position in the 208 zone ( +4.8%)
--> Stop Loss at 188.9 ( -4.8%).
--> Ratio 1:1
POSITION 2 ( TP2 ): We open a Trailing Stop type position.
--> Initial dynamic Stop Loss at (-4.8%) (coinciding with the 188.9 of position 1).
---We modify the dynamic Stop Loss to (-1%) when the price reaches TP1 (208).
-------------------------------------------
SET UP EXPLANATIONS
*** How do we know which 2 long positions to open? Let's take an example: If we want to invest 2,000 euros in the stock, what we do is divide that amount by 2, and instead of opening 1 position of 2,000, we will open 2 positions of 1,000 each.
*** What is a Trailing Stop? A Trailing Stop allows a trade to continue gaining value when the market price moves in a favorable direction, but automatically closes the trade if the market price suddenly moves in an unfavorable direction by a certain distance. That certain distance is the dynamic Stop Loss.
-->Example: If the dynamic Stop Loss is at -1%, it means that if the price drops by -1%, the position will be closed. If the price rises, the Stop Loss also rises to maintain that -1% in the rises, therefore, the risk is increasingly lower until the position becomes profitable. In this way, very solid and stable price trends can be taken advantage of, maximizing profits.
--> What is the reason for the fall?
One possible cause would be that the fourth quarter revenues did not reach what was expected, which see in these numbers a sign that Google's parent company was being affected by the increase in competition in the digital advertising market and the slowdown of its cloud computing business.
A second reason is that Google surpassed historic highs days ago and it could be a MANIPULATION and PROFIT-TAKING movement by some FUNDS taking advantage of the volatility of the value to present results. In any case, the results ARE GOOD and the TECHNICAL ASPECT is good, so if nothing strange happens, the trend in Google will continue to be bullish.
--> What technical aspect does it have now after the -7% fall?
If we look at the graph, the technical aspect is still clearly bullish (Bull). In addition, it did not lose any of its main supports, so we will continue to think about long positions.
--> When could we enter?
The table shown in the graph indicates that the MOMENTUM in H1, H4 and DAILY time frames is bearish (Bear) and also the STRENGTH in H1 is bearish (Bear). Therefore, to ensure that the pullback has ended, we have to wait for at least in H4 the MOMENTUM to turn bullish (Bull) again. And when could this happen? When the price exceeds the 198 zone, it is very likely that the IVO indicator will already show us bullish MOMENTUM ( Bull ).
(If it happens before, I will update the analysis to anticipate the entry).
--> What important support does Google have?
The 184 zone is a very important support zone that, if not respected, we could see a much deeper retracement phase.
-------------------------------------
Strategy to follow:
ENTRY: We will open 2 long positions if the H4 candle closes above 198.
POSITION 1 ( TP1 ): We close the first position in the 208 zone ( +4.8%)
--> Stop Loss at 188.9 ( -4.8%).
--> Ratio 1:1
POSITION 2 ( TP2 ): We open a Trailing Stop type position.
--> Initial dynamic Stop Loss at (-4.8%) (coinciding with the 188.9 of position 1).
---We modify the dynamic Stop Loss to (-1%) when the price reaches TP1 (208).
-------------------------------------------
SET UP EXPLANATIONS
*** How do we know which 2 long positions to open? Let's take an example: If we want to invest 2,000 euros in the stock, what we do is divide that amount by 2, and instead of opening 1 position of 2,000, we will open 2 positions of 1,000 each.
*** What is a Trailing Stop? A Trailing Stop allows a trade to continue gaining value when the market price moves in a favorable direction, but automatically closes the trade if the market price suddenly moves in an unfavorable direction by a certain distance. That certain distance is the dynamic Stop Loss.
-->Example: If the dynamic Stop Loss is at -1%, it means that if the price drops by -1%, the position will be closed. If the price rises, the Stop Loss also rises to maintain that -1% in the rises, therefore, the risk is increasingly lower until the position becomes profitable. In this way, very solid and stable price trends can be taken advantage of, maximizing profits.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.