Google’s ( NASDAQ:GOOG ) stock chart offers a wealth of knowledge for both new and seasoned investors. By applying simple technical analysis traders can view key buy and sell signals, resulting in smarter and more profitable investment decisions.
The big advantage to technical analysis is the ability to apply its lessons today and anytime in the future. Professional investors such as Dan Zanger have mastered the basics and as a result are multi millionaires today.
Take a look at the following stock chart of Google ( NASDAQ:GOOG ) and then read through the numbered points for an added explanation.
1. The purple 1 is a descending channel identified in a previous post of Google.
2. The blue 2 is where Google gapped through $475 resistance and opened above $525 a share in mid April. This was earnings related.
3. The blue 3 was a small bull flag with $560 as resistance. Google ran to $600 in three days following the break, peaking at $602.45.
4. The blue 4 shows how a series of lower highs formed over several months. $540 support held through this time period until point 5 where bears to back control of the stock.
5. The blue 5 identifies when Google broke below its key $540 support. The stock tried to rally and made it back above $550 but quickly fell back below. This ultimately lead to lower prices below $520.
6. The blue 6 shows how once Google had fallen through $500 this price level became heavy resistance. A rally in mid August quickly ran out of juice which lead to lower prices once again.
7. The blue 7 shows key support line at $465 which could not hold up when being tested for the third time.
8. The blue 8 identifies the latest ascending channel that was formed in September and lead to lower price back below $425. Ascending channels are a common bearish pattern seen in downtrends and almost always result in lower prices.
—> Next Chart, General Motors (GM)
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