Wednesday, January 26, 2011

Copping a Feel

One of my pastimes in retirement is watching the action of the stocks I own. Most days, I follow their movements, up and down, throughout each trading session. This gives me a feel for, and an intimacy with, their actions that no amount of chart-hugging can provide.

At any given time, I have an intuition about their intraday meanderings - at the open, during the midday stretch, and into the close - as well as their likely longer term movements - cyclical and secular, before and after earnings reports. I'm not always right, but neither am I often wrong.

I know, for example, that the market is in an uptrend, owing to a surprising recovery in the economy and Bernanke's quantitative easing; and that, against this background, GOOG, C, COP, OIH and ATPG are in solid upswings. Nothing to do but wait for the last half of 2011, when the easing eases and eventually ceases. That will be an inflection point.

I've watched GOOG the longest (six years), and my feel for it is visceral. In 2008-9, I rode it down, day by sickening day, to $270, passing levels I thought I would never see again; and, since the turn, I have ridden it back up, feeling in my gut the struggle between the traders, persistently selling it short as though this was still 2008, and the long-term buyers who can't believe their luck at still being able to buy this stock at these levels, given the spectacular performance of the company, quarter after quarter.

So, when I posted, last Saturday, that GOOG might just make a stand at $601, I based it on the fact that GOOG had just mounted a monumental struggle from the low $400's to over $600, and then had revisited the high $500's before breaching $600 again - I could feel it wanting to go higher. And so it has.

I think the way is clear for GOOG to make an assault on its all-time high of $741 this year, probably sooner rather than later. There will be pitched battles at $650, $675 and $700, but these will be little more than skirmishes with the short sellers.

My big decisions will be made at these milestones: I may lighten up a bit and try to trade for a few thou, but my gut tells me to keep my eyes on the prize. If, however, I find GOOG in the rarified air between $750 and $800, I will definitely take some shares off the table. If I don't, Cramer will revoke my subscription to RealMoney.

Saturday, January 22, 2011

The 800 Dollar Gorilla

Anyone who doesn't sense the hand of that jokester, Yahweh, in the actions of equity traders has only to mark the recent fortunes of AAPL and GOOG, post-earnings. Both reports were stellar and both contained gotchas, regarding the leadership of the companies: Jobs is sick again, and Larry Page is replacing Eric Schmidt.

Both stocks tanked when the stories came out, but AAPL recovered quickly since, in the firmament of traders, Jobs is next to Godliness. GOOG, on the other hand, dithered around after hours, but then, the next day, sank like a stone because the stupid traders think that Larry and Sergey are a couple of goof balls - they envision Larry, instituting four days a week for employees' personal projects and one for the company; and they envision Sergey, breaking off relations with the entire world, because no country is pure enough for him. Never mind that the big analysts were unanimous in their praise of Page and Brin, taking over from Schmidt, and several, for the first time, issued price targets of $800 for the big gorilla. It's the stupid traders whom Yahweh selects for his jests.

So we have GOOG back at $612, and apparently heading lower, after I just said that we didn't need to see GOOG at $600, ever again. My bad. However, with Yahweh, it's never over - GOOG may well turn around at $601 and head straight for Hallelujah Land.

Wednesday, January 19, 2011

Google Eve

Google Eve beckons, once again. This time, the traditional wienie roast on Dover Beach has been canceled. All Googoptimists are encouraged to stay in their homes tonight and meditate on GOOG's fate tomorrow.

We're at a critical juncture. GOOG's story is good, the charts are aligned, GOOGtide is rising, but that's a perfect setup for a little joke from Jahweh, manifested through the actions of traders. We got a big bounce last time - is it too much to expect another one, this time? If GOOG is going to keep rising, we'll need the mother of all blowouts tomorrow night.

It's time for GOOG to grow up and surpass its all time high. We don't need to see $600. Ever again.