Google Slips Despite Good News

Google (GOOG, $418.66, down $1.29) succumbed to the market’s downfall despite some good news yesterday. We learned that Google’s new Chrome web browser is already making waves and a deal with NBC Universal had the stock moving higher right out of the gate but by the end of the day, the stock finished in the red.

I said if we could get into the September 460 calls (GOPIL, $1.70, down $0.15) at $2.00-$2.25 Tuesday morning, “we may be able to ride them higher for the rest of the week”. Well, how about riding them for about a half an hour? Google opened at $423 and jumped another $9 to $432 within the first 20 minutes of trading. The calls opened at $2.00 and hit a high of $3.30 which gave us a quick 50% profit.

Remember, we are in a volatile market which means you can get whipsawed in-and-out of trades. Instead of looking for the homeruns, take what the market is giving you. The homeruns will also come but never pass up 50% profits in a day or in this case 30 minutes. At the very least, sell half the position. That has been working extremely well for us lately.

I still think Google will rally a little by the end of the week, maybe even this morning. The good news is that the shares were up $3.34 in after-hours trading. Hopefully Google can get back to the $430 level so that these calls can return another 50% or more.

Rick Rouse
Rick@OptionsMentoring.com

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