Trading Idea - Google A Doji Close
Published on Thursday, 31 May 2012 04:36 Written by TradersHuddle Wire
New York, May 31st (TradersHuddle.com) - Shares of Google Inc. (NASDAQ:GOOG) closed the trading day lower by $4.56 or -0.77% from its previous close. Google's price action formed what is considered to be a doji close, where the open and close prices are very close to each other, mainly signaling an indecision between buyers and sellers.
Google Inc. (NASDAQ:GOOG) is a global technology company that provides a web based search engine through its website. Its automated search technology helps users to obtain instant access to relevant information from its online index. The company provides targeted advertising and Internet search solutions, including web, image, groups, directory, and news searches.
Google's trading range is defined by a trough, which marked calculated support at $588.28 and by a peak that set the resistance point at $637.85. These levels are closely watched by traders managing their positions.
Traders wanting to establish a position in Google or traders that are already holding the stock can use the doji close to their advantage, since the pattern present a short-term pause in the stock's price action. This pause results in an entry point for traders depending of which way the stock resolves this short-term indecision.
The Doji is an important candlestick pattern that provides information on their own and as components in a number of important patterns. Doji form when a security's open and close are virtually equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign. Alone, doji are neutral patterns.
Any bullish or bearish bias is based on preceding price action and future confirmation. In the case of Google, given that the stock finished the session lower, bears should monitor the stock, as it could reverse if it manages to trade above its intraday high. Below a Doji illustration:
- Google Is Near a Key Resistance Area
- Pull Back Expected: Google
- Trading Idea: Is Google Breaking Out?
- Google Broke Resistance
- Close to the 50 Day Moving Average: Google
- Google Is Approaching its 50 Day Moving Average
- Key Levels for Google
- Is Google Closing in to Support?
- Is Google Waiting for a Break Out?
- The Range Is Tightening in Google
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