August 27 - Google Pattern Analysis

The chart below is Google's 2 minute chart for August 27th, with a comparison plot of the S&P500 in blue. Click on the chart for an expanded view.

Google's stock mostly trades in sync with the board market. In today's trading there was a period of time where GOOG diverged from the market to trend lower while the S&P500 traced higher highs. This divergence provided a good opportunity for a high-probability long position.

At around 1:30pm, the divergence was recognized and traders rushed in to close the gap. This can be seen by the rise in volume. In this situation a trader could have gotten long at the time the downtrend line was broken (first arrow) or a more conservative time when the local resistance was broken (second arrow). This would only be a quick-in-quick-out day trade.

For the rest of the day the stock traded in sync with the broad market.