Has a Major Topping Pattern Formed In Google?
- Posted by TheArmoTrader
- on October 1st, 2013
Google has had an amazing run over the past couple of years. It is up over 35% since the beginning of 2012 and up over 25% year-to-date. However, the move up has pretty much stopped since May. Over the past couple of months, Google has formed a technical pattern has formed that might be a cause for concern for $GOOG bulls.
Google has formed what technical analysts/chartists call a “Head-and-Shoulders”. This is a topping pattern if confirmed. Right now, Google is trading in the middle of the its multi-month range. If it moves higher from here and breaks out, than the head-and-shoulders pattern is nullified and the past few months will just be marked as a time of consolidation (which is very much possible).
But if it breaks down below the $844-847 level (the “Neckline), the Head-&-Shoulders pattern is confirmed and the stock would be headed much lower. If $GOOG does indeed break that $844-847 level, I’d expect it to trade down to the next major area of ~$766, which used to be former resistance but acted as support in April. A measured move will put Google down to $800. So those are two possible levels to watch for support if Google breaks down.
So what is it for Google? A Head-and-Shoulders top or just a normal consolidation setting up for higher prices?
$GOOG Daily chart
Below is a weekly chart. In this chart the consolidation is more evident as you are able to see the major run-ups and pauses $GOOG has had over the years.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Jerry Khachoyan is currently an undergraduate student at UCLA pursuing a degree in Political Science. He started trading in September of 2008. He concentrates on using technical analysis and reading the tape to enter the best risk/reward trades. The stock market to him is one of the greatest inventions by man.
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