One stock in the computer services complex that's flirting with a major breakout today is Google (GOOG). This stock has done too much for the bulls or bears in 2011, with shares up around 7.9%.
If you look at the chart for Google, you'll notice that this stock is flirting with a major breakout now that shares are bumping up against its 2011 high of $642.96 a share, which is also a big overhead resistance level. At last check today, Google has printed a high of $645 a share, but has since then pulled back to its current price of around $643 a share.
Traders should now watch GOOG for a sustained high-volume move and close above $642.96 to $645 a share to trigger a much larger spike higher. Look for volume that's tracking in near or above its three-month average action of 3,094,800 shares. At last check, volume has registered just 1.4 million shares, which is significantly below the average action. If that volume can improve into the close, or in the next couple of trading sessions, then look for a large spike higher in GOOG.If you're bullish on GOOG, look to be a buyer of this stock off any weakness and simply use a mental stop that's a few percentage points below the breakout level near $643 a share. If GOOG is going to rip higher in the coming days of weeks, then the stock shouldn't trend too much below that $643 level. One way to play GOOG is to buy some near-the-money call options if you see the volume improve and the stock trending above $643. Target a $30 to $50 spike higher in GOOG if this breakout holds. Google, which shows up on recent lists of 13 Tech Stocks to Buy in 2012 and the 10 Best Revenue Growth Stocks for 2012, was featured recently in "5 Stocks the Big Funds Love for 2012."
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