Important Trading Levels for Google Friday

• Posted by Greg Harmon
• on April 14th, 2011

Google, (ticker $GOOG), released earnings Thursday night to the disappointment of the market. The options expiring Friday had priced in something like a $25 move and it got all of that and more to the downside in the first few minutes after the release. So how do you prepare to trade this Friday. Let’s look at the charts.

Google, Daily

On a daily timeframe GOOG had been consolidating between the 38.2% Fibonacci at 563.00 and the 23.6% Fibonacci at 593.56. The tightening 200 day Simple Moving Average (SMA) from below and the 50 and 100 day SMA’s from above were also bounding the range. The double bottom from November and March has a low of 551.28 and the gap below that is closed at 547.49. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator were flat-lined and not giving any real guidance for a future move. Since it traded lower after hours note there is also support at 538.30 and then 525 and 513.59.

Google, Weekly

The weekly chart was retesting the 61.8% Fibonacci level at 556.26 from above as support before earnings. It also had a flat-lined RSI and MACD, but the MACD is negative. Look at the 50 and 100 week SMA’s at 547.54 and 531.50 respectively as support below and then the 525 level that was previous support in the First Quarter of 2010, before the area between 497.27 and 505.42 provides strong support from the 50% Fibonacci level, 200 week SMA and the 500 round number. These weekly numbers gain in importance tomorrow as it is the end of the week.

In the after hours the stock made a beeline for the 550 area and has been leaking lower ever since during the conference call. Currently at 5:40 pm EDT it is at 546.67, filling the gap on the daily chart. This does not ‘count’ on the chart as filling the gap during the after hours session, but it can show how the price might react in Friday’s trading. Watch the levels noted above to the downside for potential support Friday and remember once one is broken it immediately becomes resistance. Trade it well.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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