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Minyan Mailbag: Still Gaga Over Google?


You my boy GOOG!


Editor's Note: Minyanville is a community of people who share an interest in fiscal literacy. As perspective is an important aspect of our daily routine, we share this exchange with hopes that it adds balance to your process.


I am not well schooled in PnF charting, but the PnF chart here is a 4x3 chart, correct?

Also, it needs a close of 308 to get a column of O's. Is that right?

296 or below is a double-bottom break?

I am contemplating shorting the stock, but I have been burned before. Perversely, that could make the next decline a meaningful one (people saying, "I've been burned before, I think I'll pass," only to later say, "I am going to short this puppy on the next rally," and the inevitable lack of patience rears its head and people say, "Nah, I'll short this pig now.").

Minyan Ryan


Yes, it is a 4x3 chart. As long as the chart does not chart a new X today with the move to 324, (you always continue in the column you are already in until you cannot do so and the three-box reversal action point is hit, and GOOG began the day in a column of Xs while the red Os on the chart reflect action if the stock were to close right here) it will reverse down since it moved three boxes or more lower.

The close is insignificant in charting terms (though it is important for other reasons), the intra-day action is what causes the chart to move higher or lower.

And yes, a move to 296 or below would be a double bottom break.

As for shorting GOOG, in the interest of education and not advice, I can only say that generally speaking I need to see a clear DeMark exhaustion signal, as well as some other divergences, to consider shorting a stock that is:

a) on a point & figure buy signal
b) in a strong uptrend
c) of cult status

Fundamentally, GOOG does not make sense to me, but I don't consider that when determining whether to put on a position or not since there are very few things that make sense to me fundamentally.

Technically, GOOG has registered a number of important DeMark TD-Sequential exhaustion signals in the past four months, but each time the stock has found cult support and enough demand to take it higher.
Of course, I frequently operate in "Do as I say, not as I do" mode, as evidenced by the fact that I shorted GOOG earlier this month a bit higher than this level, but was forced to buy back the stock when 320 (new buy signal) was hit.

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