Adding to a Winner
Today's jobless claims tossed a bit of a rally to the markets in the earliest part of the session but the bullish sentiment quickly faded and we now find the S&P 500 nearly flat on the day. I still like the bull side of this market, and as long as we can continue to hold 1220 in the S&P I'm only going to be focusing on long trades. This includes day and swing trading. I'll also be watching market internals like the volatility index (VIX; $17.61) and the transports ($TRAN; $5054.28) the verify big moves and watch for any possible corrections.
Last Thursday I detailed a position I was taking in Google. (GOOG; $591.30) The stock had several time and price confluences for support and with my expectations of the S&P 500 holding 1170 at the time, this was a good setup. The trade has moved in our favor and now presents a fresh buy signal. On the analysis of a daily chart we now have the 21 period and 50 period moving averages crossing, a signal many market technicians refer to as a nice buy signal. For those that have already entered the position, we'll continue to ride the December options up until $601.22 with a two bar trailing stop. If you're just taking this trade today, I like heading out into January and using a little better 1:1 stop loss ratio as show in the chart.