Stock Ideas 
Investing Ideas Profiting From Divergences?
Investing Ideas Profiting From Divergences? 
Market Watch
| All it took was a 9% fall. That's how far the S&P 500 declined from its July peak before the "defensive stock" articles started springing up last week. | |
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| Profiting From Divergences? |
| Tuesday, 22 January 2008 | ||||||||
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On December 13, 2007 I wrote a piece that pointed to shorting opportunities in the large-cap sector. At this point in the game, Apple was trading for $189 and Google at $698. In a Chart of the Day segment titled, “Utilizing Divergences for Big Gains: Two Tech Giants Ripe to Fall,” I had stated the following: “It was just a day ago when I discovered two bearish divergences occurring simultaneously between the RSI and price on both Apple and Google’s charts. After an impressive run, these two plays are losing buying momentum and are at the end of the road.” Example setup for Google (GOOG:Nasdaq) seen below: Goolge  Today, Google’s stock trades at $600.25 -- a $98 dollar drop in one month’s time! It didn’t take long for Google to change trends, and it would have been an incredibly simple trade to make, especially when you consider using option strategies to capture big gains. Similarly, Apple’s stock fell from $189 to today’s price near $161 -- a $28 drop and another win in the trade column. Follow this link to learn more about these trades and more hot option picks, from Black Sheep Trader. Good investing, Stephen Oakes Editor, Black Sheep Trader
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