Alphabet (Google) is down over $100 due to its earnings announcement.
Should you buy it here?
Maybe, click here for the trade setup.
Alphabet (GOOGL) is just dropped over 8% in on market open and landed on its 50-day moving average.
It’s also sitting in an area that could be good support.
Very often the market over reacts to news events like earnings.
That’s the beginning of an argument to buy GOOGL on this drop.
However, there a simple tactic that can help you avoid buying to early and avoid buying completely if the time is not right.
The set up for event gaps down to support it to use the even day as your entry and stop levels.
In this case the means after today’s close, if GOOGL trades over today’s high it’s a buy and the stop is below today’s low.
To be clear, if GOOGL spends several days below today’s low then the trade is no longer in consideration. We want a move higher to begin within a week.
Of course, this can also be used as an entry for options trades!
Rick Nartarian, Chief Investment Officer
The American Investor Daily