Saturday, October 21, 2006


Despite losing money over Google options, I still have this weird, borderline obssessive fascination over this stock. I don't know why. Google gapped up after yet another record quarter, closing @459.67 on Friday. So, to appease my GOOG obssession, I've compiled some statistics about goog's earnings related breakout gaps in the past 2 years.

#gap fills/#gaps: 5/7
time length before gap fill: 2wk, 6wk, 4d, 2d, 3d, 3m
#of unfilled breakout gaps: 2
context of breakout gaps:

1st one was during the traditional fall market run-up, but it was not part of any index.
2nd one was during a sideways mkt
3rd one was a true breakaway gap that never filled, happened during market up trend.
4th one occurred just before market topped, was filled during the traditionally slow summer doldrums
5th one was a breakaway gap (occurred during mkt uptrend) that was not partially filled until Mar/06, about 5 mo. later.
6th one was a gap down (not highlighted in the chart), filled on next Q report, occurred during sideways market.
7th one was filled during sideways mkt (and just before mkt correction).

And that leads us to our 8th gap yesterday (Fri. Oct. 19). The context? Market is in an overbought phase, but the trend is still up. The previous 2 October earnings gap ups led to a run of 2 wks and 10wks. Conclusion? Assuming that the market stays healthy (ie. no market correction), the ***BET*** here is that Goog goes on a run-up at least to its ATH @475. Probably at that point we will find out whether this is a gap that gets filled or is another true breakaway gap.

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