A Closer Look at GOOG

I was scanning over a number of daily charts this morning when I came across this lovely GOOG chart. If you saw my rock blog last weekend then you know I'm bearish on the weekly time frame based on the retrace back to the apex of a broken rising wedge. So far that idea has been profitable and there were a few other interesting qualities I wanted to point out on the daily time frame.

First of all, you can see the symmetric triangle clearly on the daily. After riding across the upper end of the triangle for a few weeks GOOG now seems headed back down to test the lower end around $475. Thats where came up with my "short for an easy $100" target. The CCI gave a sell signal this week on the daily time frame and you can see the negative divergence on the RSI so things are shaping up for the bears. If we ignore the triangle for a minute, GOOG had a clear breakout above the all so important 200 day moving average in late April. After stalling up there for weeks the stock then plunged back below the 200 dma this week. This is what looks like a failed breakout, something I have blogged about at length. The usual case is that failed moves lead to fast moves. And it just so happens that this effect would be greatly enhanced due to a very large gap in the chart that exists in the chart at about $540. If GOOG enters that gap I would bet it drops like a hot knife through butter as the gap gets filled and the failed breakout makes it's "fast move" lover. One word of caution, the stochastics are showing GOOG is short term oversold so it might take another week or so for GOOG to make the anticipated move. The real question is if the symmetric triangle will break to the down side or not, doing so would foreshadow a bona fide bear market for GOOG.