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.


Larry Blumen said...

As I reread this post, I'm prompted to offer this caveat: like most active investors, I'm a freaking genius during rising markets, and a hapless sap during declines.

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Larry Blumen said...

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