Planning the Trading Range and Weekly Levels for Google GOOG

Oct 14, 2013: 11:26 AM CST

In our prior update for Google (GOOG), we noted the “End of August Key Support Level” which was an effective and tradable support level.

Let’s update the chart and note the lengthy sideways trading range (rectangle) in the context of the weekly planning levels.

Here’s the sideways rectangle trading range at work currently:

Sideways Rectangle and Support Trade Planning for Google GOOG

The sideways consolidation or “rectangle range” pattern actually has a $10 range for the upper and lower trendline boundaries as drawn.

The lower support boundary extends from $845 to $855 per share while the upper resistance boundary similarly contains a $10 range from $910 to $920.

It’s more important to pay attention to the broader range from the $850 to $910 level which has contained the ‘bounces’ or ping-pong range-bound price action in Google.

Traders who enjoy playing “fade” or reversal strategies can continue playing movements toward or away from these visual trendlines.

However, breakout traders will need to continue to hold Google (GOOG) on a watchlist until we see a confirmed breakout below the critical support level $840 or above the $930 high.

Specifically, focus your attention on the $840 per share critical support confluence.  A failure or breakdown here not only would break shares out of the rectangle pattern, but also break price under the rising 200 day SMA.

Here’s the structure and planning levels on the Weekly Chart:

Google GOOG Weekly Trade Planning Technical Analysis Trend Bull Market

In the broader picture, Google reversed into an uptrend in late 2011 (with the bottom just under $500 per share) and broke a similar sideways trading range (between $550 and $650) in late 2012 for a week-over-week breakout event on rising volume (a great educational example).

From there, Google has retraced three times, and this third (current) retracement has devolved (or consolidated) into a sideways trading range best seen on the daily chart.

Note how the lower price trendline boundary stretches back to the early 2013 price high.

We also note a visual momentum and volume divergence which serves as a caution signal, again drawing our focus on any future breakdown under the $840 level.

If so, look for a play toward the rising 50 week EMA into $825 which would be through “Open Air” on the Daily Chart (no known or obvious support level).

Continue monitoring the price action within the trading range and any future breakout that may occur.

I’ll be discussing breakout, retracement, and reversal trading tactics live at the Las Vegas Traders Expo on November 22 – join me and your fellow traders at the free expo!

Corey Rosenbloom, CMT
Afraid to

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Corey’s new book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

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One Response to “Planning the Trading Range and Weekly Levels for Google GOOG”

  1. Daily and Weekly Charting the Google Thousand Dollar Breakout | Afraid to Blog Says:

    […] Dollar Breakout Oct 18, 2013: 12:07 PM CST In our last update of Google (GOOG), we noted the “Sideways Range and Key Levels for Trading Google,” and we now note the upside breakout of the trading range not just to new all-time highs, […]