Google Stock Quote

It had to happen.

After a significant runup in the stock price since the most recent earnings announcement a little over a month ago, the stock finally broke.

You can’t say that this not expected. A stock that breaks out and continues to advance more than 20% is bound to take a break from the march to higher prices.

Yesterday’s price action was the early indicator that a top might be in. Yesterday’s price bar was a reversal bar to the downside: Opens at a new all time high, advances slightly higher, but closes down for the day and down relative the previous close. As a matter of fact, the stock closed below Friday’s low, “bearish engulfment". Granted, Friday was the day after the U.S. Thanksgiving holiday - typically a low volume, small range type of trading day.

Now the trick is to realize when the stock is ready to move higher again.

I’ll be watching for a reversal bar at the obvious Fibonacci retracement levels across mulitple time frames. If you are interested in knowing how to calculate and use those price levels, use the sign up on the side to get on the Fibonacci retracements newsletter.

I’ll be honest, I didn’t think it would be this easy. Google’s stock price over $400. I realize that the day is early and anything can happen. But the stock seems to have plowed through the century mark with ease.

If the stock closes today higher than it opened and on higher than normal volume, we might be in for another leg up.

If history is any indication of what might happen next, then Google stock is likely to have a difficult time breaking the $400 mark.

Previously GOOG ran into resistance at the $200 and $300 levels in Novmeber 2004 and June 2005, respectively.

Of course, we know what happened since. While I have very little doubts that Google’s stock price will move higher, I am fully prepared for the stock to spend some time forming a base at or below the $400 price level before moving higher.

Here’s some fibonacci time analysis that suggests a top might be forming.