How Will Google (GOOGL) React To This Massive Resistance Wall?
The market seems to be on the move higher after a strong move on Wednesday that was really lead by the tech sector. Names like Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), and our stock that is in focus today, Google (GOOGL). This rally looks to have some legs that could keep running.
However, one thing I think is important to draw attention to is the fact that this whole debt ceiling debate could be a perfect example of a “buy the rumor, sell the news” type scenario. If that is the case, that could be the perfect excuse for the market to deal a pullback, the significance of which is hard to predict.
This also come in to play when looking at the trade we have in front of us today. When we look at the chart on GOOGL we see one major level that is drawing closer and closer the higher the stock pushes. That level is the breakdown level at 125, which triggered a massive selloff last April. If that level acts in accordance with the idea that old support turns into new resistance, a decently high probability trade setup could be brewing.
It would be a pretty aggressive play, however, this could be a pretty good area to look for puts. In addition to being a major level according to the past performance of the stock, you can see by looking at my MACD, as well as RSI indicators in the video below, the stock is currently extremely overbought. These are further confirmations a pullback could be imminent.
After GOOGL’s massive run over the past several weeks, make sure to keep a close eye on this stock. Even if the stock’s rally was to continue, there are some indicators that could lend some credence to this area being ripe for a pullback.
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