Just a month in, and 2013 has already been a good year for
(GOOG - Get Report)
. Despite a temporary pre-earnings sell-off, shares of the search giant have rallied close to 9% so far this year. And now, it looks like this stock could have further to run this year.
The price action in Google doesn't get much simpler. Google is currently bumping its head up against new highs, testing the same $770 level that shoved shares considerably lower back in October. Investors should be watching for a
above that price.
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Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses.
Ultimately, technicals all come down to buyers and sellers, and resistance at $770 is an indication that there's still a glut of selling pressure at that level. When buyers become more eager to pile onto Google positions than sellers are to take gains, then we'll have a high-probability trading opportunity in this stock.
, measured by 14-day RSI, looks positive here too. This time around, GOOG isn't going up to test resistance while it's already in overbought mode. Until the breakout, I'd recommend sitting on the sidelines.