Google () faces an important “make or break” resistance challenge as a short-term range pattern continues.
Let’s see the pattern, highlight the level, and plan our trades from this vantage point.
A simple chart shows us the short-term rising range (highlighted) that has developed from August to present.
These trendlines have contained price as it bounced from upper to lower levels.
At the moment, price interacts with the upper trendline along with the upper Bollinger Band and resistance cluster near the $ 590 per share level.
We’ll keep the planning simple and focus our attention and trading plans around this level.
Google becomes “breakout pro-trend bullish) above the $ 593 and $ 595 levels (allow room for a trap) which targets the $ 600 level once again (and above).
Otherwise, the next swing could easily be the third simple downswing (retracement) back to the lower rising trendling which would intersect just above the $ 570 level in the near-term future.
Here’s a zoomed-in perspective of the trendline pattern in motion:
Drawing trendlines isn’t an exact science as you can see above (nothing in trading is!) which is why we like to reference “levels” as opposed to exact prices to expect a precise reversal or inflection.
Nevertheless, the trendline cluster overlaps the $ 590 to $ 592.50 level which should be our “make or break” resistance level.
Bullish breakout trades are favored above this price level and another bearish retracement lower (target $ 573) is favored on a movement down against this level.
Of course, let price always be your guide.
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade