Google Stock Quote

GOOG stock kept up the pace moving to new highs once again. While the stock has had an impressive run up, there are signs that a correction could occur soon.

Take a look at the 60 minute chart:

GOOG 60 minute stock chart

Tuesday started with a bang. The stock gapped up above the previous day’s high. That is a bullish move considering that Monday’s price bar was bearish with the close less than the open. From there, the stock moved up strongly each hour. Volume picked up also.

Wednesday started out strong - but, the stock made all of it’s move in the first hour of trading. Couple that with the fact that the volume was the highest ever, besides the first day of trading, and you have a setup that shows exhaustion.

Profit takers will likely exit long positions below Wednesday’s 60 minute $130.65 low on the 11:30AM bar. This isn’t necessarily the end of Google’s streak to higher and higher prices, but watching how the price acts if it drops below the $130.65 low will paint a picture of future price action.

Google is moving in on the $128.84 target previously mentioned using Fibonacci expansion targets.

That’s right, once the stock took out the high set in the first week of trading, Fibonacci expansion projected a possible high at the $129 level. Now the stock is closing on that price level.

What’s next. This price level could easily turn into a serious price resistance level. Of course, the stock needs to prove that it is at resistance. And today’s price action indicates anything but that.

Traders who have a long position in the stock will consider placing a trailing sell stop below the one day low. Sell order would be placed at $120.20 or less.

That’s right, even though GOOG made a new high on Friday, the closing price indicates weakness.

The sixty minute chart shows the stock making a new high early in the day, but finishes very near the low of the day.

GOOG 60 minute stock chart

The daily chart shows the stock forming a “shooting star” in Candlestick terms. The “body” (the difference between the open and the close) is near the bottom of the daily price range with a long “tail".

The new high for Thursday occurred in the last hour of trading.

Not a bad performance considering the lackluster movement in the broader indices.

The 30 minute chart shows Google stock making a new all time high at the end of the day. The stock ended up closing below the previous all time high. It makes you think that the stock might be finding resistance at these price levels.

30 minute chart with new high

Today’s price bar was an inside bar. The high and low for today’s trading range was inside of yesterday’s range.

Inside day’s are often signs of indecision with the current trend (in this case up) and typically provide a low risk entry in either direction.

Note that a few of the price bar’s near the recent swing low around $100 were inside bars and did provide a low risk way to enter the stock to the upside.

inside bar

The stock keeps marching to higher and higher prices.

Looks like the bulls have this stock firmly in their control. The stock has already passed the 100% projection of the first up swing.

Let me be brave enough to say that the stock could very easily go to $128 before turning lower. I’m basing that comment on the fibonacci relationship shown here:

Google Daily Chart

An inside day near the current price level would provide a relatively low risk entry into this stock for the buyers.

Another method of entry to the long side would be a “pullback". My definition of a pullback for a buy is a stock that makes at least 3 consecutive lower highs. Buying the stock using this method occurs when the stock trades above the previous bar’s high.

Google stock closed at it’s highest close ever. And did so on a large range day.

There should be no doubt in anyone’s mind that Google stock will test the all time high of $113.48 set on the third day of trading. More than likely, that will occur during the next trading session.

The stock made an impressive move on Friday. It looks like the stock is ready to make another run up.

The daily chart recently showed a couple inside bars. Thursday’s inside bar lead to a long entry above Wednesday’s high. Trader’s who entered using this technique would typically place a protective sell stop order below Wednesday’s low.

GOOG daily chart

The great thing about the recent inside bar signal is that open profits have already equaled the initial risk. Trader’s who plan on trading for the long haul will have moved the protective sell stop to breakeven.

Looking at the smaller 30 minute time frame charts show GOOG forming a triangle with a break to the upside.

What’s most interesting about this pattern is that the stock came back and testing the descending trendline before making Friday’s big move. This is the type of price action to watch for.

30 minute chart

P.S. - Here’s the software that creates these type of charts.

Google is running with the bulls again.

The stock broke the triangle a few days ago and has moved decisively to the upside. Google closed right about where the triangle target forecasts. See the previous post for details on how to measure price targets.

Pullbacks in this stock will probably be met with eager buyers who missed the initial run up in this stock.

GOOG stock broke the triangle - to the upside.

Google Stock

Don’t be surprised if GOOG moves higher from here (it’s already started).

Measuring the height of the triangle gives a price range of $3.43. If you add that range to the top of the triangle at $102.37, then a likely price target for an advance is $105.80.

Looking at the thirty minute chart shows GOOG trading within a triangle.

30 minute chart

Yesterday I mentioned the stock finding possible support based on Fibonacci retracements.

Today the stock traded higher - the close was greater than the open and greater than last Friday’s closing price.

Let’s see which way GOOG breaks out of this triangle.

While GOOG stock does not have a lot of history, what it does have presents some interesting Fibonacci relationships.

Starting with the daily chart:

GOOG daily chart

Notice that Friday’s price bar was an inside bar. Inside bars are often a sign of indecision with the current trend (down, in this case) OR a pause before resuming the current trend.

While that piece of information doesn’t really help us determine what the likely course of events is for the stock, the following Fibonacci relationships might.

Notice on the daily chart that Thursday’s low is just one penny less than the 78.6% retracement. The 78.6% retracement is the square root of the golden ratio - 61.8%. This price level provides a possible level of support. The 78.6% retracement level is often thought of as the “line in the sand". If the stock is going to reverse higher, then it needs to do it now at this price level.

Now take a look at the 30 minute intraday chart starting from the all time high:

GOOG 30 minute chart

The first swing down from $113.48 to $103.57 is a $9.91 drop. The same drop of $9.91 subtracted from the more recent high of $108.62 (labeled “B") gives a price target of $98.71.

Guess where the recent price low stopped at? At $98.94, a mere $0.23 higher than the ideal price target.

We have two pieces of Fibonacci evidence suggesting that GOOG might find support at these price levels. Patient traders will wait to see if the stock confirms that the recent price low is a significant low.

The course of action that gives the most confirmation (and also the largest dollar risk) is to wait for the stock to trade above Thursday’s high. Traders willing to take a position with less confirmation will wait for the stock to trade above Friday’s high. Intraday traders will look for the stock to trade above an intraday high. And amatuers will buy regardless of confirmation (and not use a stop loss order).

The stock decided to follow along with the market today.

Today’s price action is a reversal of sorts. The stock made another new low along with a lower high, BUT the stock closed greater than the open and greater than yesterday’s close.

Timid bulls will consider buying as the stock trades above today’s high of $102.37 - assuming the stock trades above today’s high. If filled, the proctective sell stop goes below today’s low or Friday’s low.

Keep in mind that I typically skip trade setups like this if the stock gaps above the signal day’s high … see the comments made regarding this exact same setup at much higher prices … just scroll down to the comments made on the 26th and 27th of August regarding the “Gap and Trap".

This is an important price level for Google stock. The $100 price level is a strong support level on the first day of trading for GOOG.

If the stock breaks below this level (and it did trade below $100 today), then expect the $95 level to be tested again.

Keep in mind that more shares are becoming available soon. Insiders will be allowed to sell more than 4 million shares this Friday. I would like to think that those insiders are in it for the long haul, but the price action will tell the true story.

And from where I am sitting, it looks like the people who own this stock are a little nervous right now.

What if you are an owner of GOOG who bought the stock after the stock went public? If you bought on the first day of trading, you would be lucky to own this company for less than $100 / share. The stock spent less than fifteen minutes trading for less than $100.

More than likely, you bought in somewhere north of $100. If you are an investor, then no problem, you’re in it for the long haul … right? If you are a trader who is long the stock and are watching the stock hovering around support you might be rethinking your trading plans.

What if the stock breaks - and breaks hard - below the $100 level? Where’s the next level of support?

The obvious answer is the all time low at $95. Can you stomach a drop like that?

And what if the stock trades below that level? I’m speculating that $85 would be a price level of some serious support (think about all the people who are kicking themselves for not getting in at the IPO price of $85).

My point is simply this, have a plan for trading this stock, or any stock, before you take a position. Once you are in, make sure you have a solid money management method for controlling your losses and letting your winners run.

Take notice.

Some of GOOG shares are unlocked as of Friday of this week.

What this means is that a group of insiders can sell their shares for the first time. The quantity, about four and a half million shares.

Google has been different then most publicly traded companies. A typical publicly traded company will have a lock out period of 180 days before insiders and employees can unload some shares.

Not Google.