LOWER VOL, VOLU AND LOWS. HIGHER CORRS AND HIGHS (GOOG BUY @711)Google C-Class shares i am bullish over the 6-12m, hence I am buying any 5-10% pull backs from highs.
Goog has been moving sideways but i think it has just started a cycle higher, in which it is about to make a higher low at 715 before moving up again to 750+
715-750 is a 5% move hence i am interesting in buying at this price with reward skewed something 1.5:1 with risk.
Coming into earnings, Goog has to make at least one bull run to highs at 770 and i believe this will be the set up for the run for several reasons:
1. since april earnings lows at 687 goog has moved in an upward trend of 688-722-700-736, the next cycle i approximate to be down to 710-3 (volume traded price) then up to 750+ (previous support turned resistance).
Also the Linear regression for the on graph prices is $723, so prices below this are below this cycles average - encouraging mean reversion upwards.
2. Goog volatility correlation is in its negative cycle - the last bull cycle to 768 began with a turn from positive to negative price-volatility correlation change.
- Plus goog's volatility is at yearly lows. Low vols is something that imo is vital for any sustained bull run, as logically, more people want to own a stock that has a greater "normalised" return and risk profile.
3. Volume average divergence - google volume is trading below its 6 month average, lower volume characterises goog's bull runs typically. Since it signifies there are fewer structural sellers that are prepared to sell the stock, thus volume drops and the price is bid up until sell side liquidity is increased sufficiently to meet an equilibrium price.
4. *please see last 3 price bars* - these bars have been highlighted as having a "topside range skew". What is inferred by this is that the candle has more activity at the higher prices e.g. the candle traded at its highs and open more than its close and low - thus this is a bullish signal as the open high and close data stayed in the upper percentiles of the candle.
- Even the first candle in question (the first bear candle), opened and closed at apprx the median price.. this is unusual. the first bear candle after a strong bullish run, usually shows heavy open-close downside skew e.g. the price opens and then closes close to the lows (rather than in the middle of prices traded) - indicating that time period closed with the price being driven/held at the lowest possibility.
If we were to see the opposite e.g. the candles closing on the lows, this would be bearish and indicate the price is wanting to push lower, since there was no difference between the low and close.
Fundamentally i am also long google anyway, hence why i liike buying 5-10% pull backs.
