Everyone's favorite search engine giant looks a bit more bullish right now.
GOOG) has made a stellar run in 2013, rallying more than 25% year-to-date. That's substantial outperformance over the broad market, and recent price action points to Google widening its lead. Shares of GOOG have spent the last couple of months consolidating sideways in a pattern called a symmetrical triangle. The
breakout is a buy signal.
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A symmetrical triangle is a price pattern that's formed by trendline resistance and support lines that are converging at approximately the same rate. A move outside of the triangle pattern is the signal to place a trade in the direction of the move. Typically (but not always), continuation patterns like triangles lead to breakouts in the direction of a stock's original price action. For Google, that original direction was up.
Since Google's symmetrical triangle is squeezing shares in a tighter and tighter range, it's also pointing toward the possibility of a volatility squeeze for shares of GOOG. That means traders should expect the move out of the pattern to be fast and big. Keep a close eye on this name.