Premium Earnings 4-18-13 Part 2

One more for tonight, Google, $GOOG reports after the bell.

Google, $GOOG
goog

Google, $GOOG, has been pulling back towards the rising 100 day Simple Moving Average (SMA) since peaking at 844 short of the Potential Reversal Zone (PRZ) of a AB=CD at 847.50, but close enough. A similar 61.8% retracement of the move higher would bring it back just below the 200 day SMA to 713.80. The Relative Strength Index (RSI) is bearish and falling with a Moving Average Convergence Divergence (MACD) indicator that is also moving lower. A downside bias. Support lower comes at 745 and 740 followed by 730 and 695. Resistance higher is found at 795, 818 and 844 with free air above that. The reaction to the last 6 earnings reports has been a move of about 6.07% on average or $48 making for an expected range of 720 to 816. The at-the money April Straddles suggest a smaller $37 move by Expiry with Implied Volatility at 105% well above the May at 44%.

Trade Idea 1: Buy the April 26 weekly 750/730/710 Put Butterfly for $3.00.

Trade Idea 2: Sell the May 720/710 Put Spread for a $1.50 credit.

Trade Idea 3: Buy the April 750/735-730 1×2 split strike Put Spread for $0.40.
Below 730 you will own the stock with a 715 basis

I like #1 and 2 together or #3. Remember this name has has the new 10 share mini options if an extra $70k in exposure is too much for your portfolio.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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