Google Stock Quote

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).