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Proactive Spreads, December 4th 2017 – GOOGL

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We came into Monday with a fairly large gap higher off the back of tax reform news.

In my eyes, we’re officially overbought. The SPX is now five, that’s right five whole days above it’s upper Bollinger Band.

That’s happened once in the past decade or so.

Time for a correction right? Well, we’ve already started to see one in large cap tech. The FANG stocks have been week all weak… so odds are that any correction will be like all the corrections in 2017: rotational, sideways, and hidden underneath the surface.

Key level in SPX is 2605, which is the low from Friday’s shakeout, and the breakout open from November 28th. Any price action above that means we have a high odds of trend continuation.

Trade #1: GOOGL

Simple trade here– pullback into the 50 day moving average and there is gap fill support from the earnings event a month ago.

Trade Setup

Expected Price: 1019

Sell to Open GOOGL Jan 950/945 Put Spread

Tier 1: Enter at 0.75, Exit at 0.25

Tier 2: Enter at 1.05, Exit at 0.65

Tier 3: Enter at 1.35, Exit at 0.85

 

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