Google Stock Quote

I’m not here to pass judgment, just my thoughts on what I see. And don’t mistake this for advice, that could cause us all a bunch of trouble.

Here’s the facts, Google earned $3.18 per share, which is up more than 60% for the comparable quarter a year ago. Also, earnings per share exceeded analysts expectations by $0.38.

Google stock is up more than $17 as of this writing at 11:18AM on Friday April 20th, 2007. The stock gapped up on the news and has been in a relatively narrow trading range so far today, about a $5 trading range. While this is all fine and dandy let me just voice my concerns on this.

This is a news driven gap, i.e. - the stock is up on a better than expected earnings announcement. Here’s a stock that exceeded expectations and is up 3.5% for the day. My experience has been that these type of news driven gaps frequently get filled. In other words, that gap that exists from the current price action around $490 down to $480ish might just get filled. The fact that the stock is not running higher on a better than expected report gives me pause. Still, the day is young and a lot can happen in the next 4+ hours. For short term traders that loaded up on the recent bullish trading setups mentioned previously, this is a field day for unloading.

I’ll close my mouth for now and watch the price action.

This has happened before and it will happen again, GOOG formed an inside bar relative to the previous bar. The time frame I am talking about is the daily charts. Given that the trend has turned up recently, a break above yesterday’s high of $476.99 is the typical long entry into a stock.

You have heard me talk about the moving average squeeze. There was a post I made a short time ago showing (in video) what a moving average squeeze looks like.

Now we have Google stock hugging the top of the downsloping 50 day moving average. There have been 3 consecutive lower highs. This lower high setup *can* lead to an explosive move to the upside once the stock trades above the previous day’s high.

Friday the 13th could be interesting for GOOG.

Those are the two price levels for Google’s stock to watch in the very short term for support and resistance. An intraday chart will show you what I am talking about. If you are reading this comment after today or tomorrow at the latest, then this is old news …

Also, watch the volume as price breaks out of this trading range as it will do. Higher than normal volume will add some conviction to a break out or break down. But if one of those analysts opens their mouth and the stock moves on the “news", well then forget it. Remember this, no news is good news - at least in terms of a substainable move.

Resistance becomes support. In an ideal world, this would be great. What I am speaking about is Google’s breakout above the downsloping 50 day moving average and recent pullback. Notice that the stock’s low for today and yesterday (as of the morning of 10 April 2007) is near the previous highs of last month’s breakout. An obvious double bottom just begging for higher prices.

If the stock is to find support prior to moving higher, then the $465 price level is where you would expect this to happen. Of course, there is a big, fat $5 gap between $459+ and $464+ that is just begging to be filled.

Now you see what happens when a stock gets “squeezed” between two popular moving averages. The stock will often “pop” out and move decisively in one direction or another.

While the day is still early, less than a hour into the trading day, GOOG has gapped up today and is trading higher. The stock opened right at the downtrending 50 day moving average and is priced higher than the opening price, up $9.62 as I write this. The consolidation of the last month appears to be giving away to the start of a new uptrend. I’ll be watching for higher than normal volume today and a higher closing price for additional confirmation.