GOOG Bearish Engulfment
I’m going to tell you in words what you can see on a daily stock chart.
Google stock formed a bearish engulfment with yesterday’s price action (20 June 2007). The open was greater than the previous day’s close, the stock made a new local high, then closed down lower than yesterday’s low.
If this is a change in direction AND the stock follows a nice A-B-C pattern with the A down leg equal to the C down leg (hasn’t happened yet), then the $491 price level is the obvious target.
The $491 level corresponds to (1) the 100% price projection, (2) the 50% price retracement of the recent up move from the mid-May 2007 low to the recent all time high, and (3) near the previous gap-and-trap high of 20 April 2007.
Now let me show you a GOOG price chart.
