The Moving Average Squeeze For Google
I meant to include a chart for this, but I will leave it up to you to confirm this on your own.
As I write this at 9AM Eastern time on 29 March 2007, I can’t help but notice that GOOG is getting squeezed between the 50 day and 200 day simple moving average. Pull up a chart and you will see exactly what I am talking about.
In the middle of this month, GOOG approached the uprising 200 day moving average. The 200 day MA has served Google well in the past and looks to continue. There has been no serious price violation of this moving average to date.
Now take a look at the downtrending 50 day moving average. In the last third of last month, the stock threw a reversal to the downside right at the 50 day moving average. Today’s price action is right at the 50 day moving average. If history repeats itself, expect the downtrending 50 day moving average at ~$465 to contain any upside price movement.
The 50 day and 200 day moving averages are converging - the 50 day near $465 and the 200 near $440 - that’s the price range I would expect GOOG to stay in until the inevitable price break occurs.
