Alphabet (NASDAQ:GOOGL) stock continues to charge higher after it jumped over 5 percent in after-hours trading, as the e-retailer posted strong results for the three months ending June 30. Where is it headed next?
Trading has been forming a bullish falling flag, in which time bulls take profits following a 10-percent jump in the two weeks between July 2 and July 15, allowing new-comers to pick up the slack and charge the next rally.
An upside breakout would signal that profit-taking has ended and that traders are prepared to resume the rising channel since April.
Trading Strategies – Long Position Setup
Conservative traders would wait for a new peak, above the 1221.59 posted Wednesday, to confirm the uptrend, followed by a likely return move to retest and prove the flag’s support, with at least one long, green candle following a red or small candle of any color.
Moderate traders may be satisfied with a close above the flag. While they may wait for a potential return-move for a better entry, they may not necessarily wait for proof of demand.
Aggressive traders may enter now, if they can afford a stop-loss below the 1190 flag support – or accept a measured loss – considering the potential volatility ahead.
Do not enter trades before ensuring a minimum of a 1:3 risk-reward ratio, to maximize statistical odds.
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