BY ANDREW GIOVINAZZI
May 7, 2024
Yo Pit Crazies,
Alphabet Inc (Ticker: GOOGL) gapped huge on earnings and retraced quite a bit. Apple Inc (Ticker: AAPL) is going through the same thing but GOOGL is not wasting a bunch of money buying back stock. Below is a real, authentic Licia Leslie pitch fork chart.
What I like about them is it gives me an idea of a range. Areas of testing and resistance to see if a stock has momentum or if it will give up the ghost and fail.
LL’s 1 year GOOGL pitchfork chart
It was kind of scary how GOOGL went right to the top of the PF range and then failed. It is making a second run to break out.
Now I have a stock, a range and a resistance. Thank you LL
Now I can price the trade.
Option trades need an opinion and an edge
The pitchfork chart helps set up areas. $180 for GOOGL would be a tough spot if it moves through there look out above. I would set up more junk contracts up there, say the GOOGL May31 180s or even a call calendar up there. The downside would be around $160. Since the upside would be a breakout I would use more calls than puts say 2 -1.
GOOGL realized vol was around 25% before the big earnings boost. As AAPL has shown us, post earnings stocks can still move in the AI era.
Tune into Prima of Pitchforks this week. Don’t be surprised if we see a GOOGL trade in the Trading Desk this week.
tThe S&P 500 Trust (Ticker: SPY) looks like it wants 520 REAL BAD!
To Your Trading Success,
-AG
Andrew Giovinazzi
30-Year Trading Pro
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