Trade – GOOG - 24th August 2004
It’s been a while since I posted a trade in this column, and what better way to rectify that than by talking about the Nasdaq's latest tech-baby – Google (symbol GOOG).
The stock has only been trading for a couple of weeks, but it has seen some good volume, and great intraday moves. Not quite up to the “good old days” of the tech-bubble perhaps, but that’s probably a good thing; I would rather have regular decent travel range than spectacular - but unpredictable - bursts of activity any day.
The chart shown here was a trade I took on August 24th. This was definitely one of the bigger moves of the week, with the price falling close to $8 in under an hour. With a range like that, it can be almost difficult to not make money, provided you have some good reliable trade setups to work with. This particular chart gave at least three crystal clear short trades. The 5 minute bars can be a little misleading – there was some big movement going on within them, and so strong discipline and a faith in the setup was required to hold on to the position, but all three setups played out beautifully, and GOOG then gave us a loud and clear exit signal at $104. Personally I caught this one a little late as I was scanning through some other stocks, but I did take the easy short at about $106.50, covering at $104.05 for a nice $2.45 per share.
A stock at this price may be seen as too expensive to trade by some, but sensible position sizing makes it accessible to all (see my article Size Matters for further reading). Even trading only 500 shares, my late and very safe trade would be worth a profit of $1225 before commission, which is not bad for 10 minutes in the market.
GOOG is definitely staying on my watch list for the time being. By keeping a few good movers like this on the radar, I can be sure of finding something to trade every day – which is why I love trading the Nasdaq!
Harvey can be contacted via his website, where you can also read about his day trading course