Yesterday I was doing some technical analysis
on a few of my favorite stocks.. GOOG, AMZN,
and PCLN. What I discovered may impact
these three stocks for the next year!

Each one of these 3 stocks are sitting
at the top of a long term channel.
(See Charts Below)

I found this interesting for a couple reasons,
Firstly, we are hot into earnings seasons...
Google Inc. (NASDAQ: GOOG) announces after
the market closes today!

The second reason is that the last time these three stocks hit this point they entered into a 4 to 6 month time correction, sometimes longer. Click the chart above to expand a 5 year chart of GOOG. Notice the two grey ovals showing where GOOG has hit the top of the trend and also what followed last time... a long time correction! I'm interested in hearing your thoughts, do you agree with me?

If I'm right, then I think covered calls will be an excellent strategy going forward for those who own shares.
How to Trade Covered Calls on AAPL is a free 4 part video series you can watch to learn more about his strategy.

Here's two ways I think GOOG could play out from here:

1. GOOG could gap up on earnings tonight above the channel and run up to $1,000. If this happens we could see the stock run very quickly and then pull back violently to retest its long term channel.

2. GOOG will enter a sideways phase giving it time to digest the last year of gains (from June 2012 to now, over $350 in gains) What do you think?

PCLN is forming a similar pattern

Here's a 3 year chart of Priceline (NASDAQ:PCLN), again the same pattern highlighted by the three grey ovals. After large moves the stock tends to cycle in a sideways channel for 4 to 6 months.

What do you think, is it time for PCLN to take a break?

Here's another example with Amazon (NASDAQ:AMZN) on a five year chart showing it approaching the top of its long term channel. AMZN and PCLN have been absolute beasts this year with the straight bullish action. Could it be time to take a rest?

What's your experience trading these stocks, do you think they are set for new highs or ready for a break?

I'm thinking that AMZN and PCLN have the same possible outcome as I stated above with GOOG. Either they gap up and run in the next week after earnings, or we enter into a sideways time corrective phase. Only time will tell at this point. I will be watching GOOG closely this afternoon to see how it impacts the NASDAQ futures and AAPL after hours.

Do you have a friend that trades any of these stocks? Send them a link to this article.
You’ll help me and them out. Two birds. One stone.

Trade On,
Micah

PS. AAPL earnings is this Tuesday, July 23rd at 4pm and AAPLTrader will be covering the earnings call with a live show I'm hosting. More about this on Monday!