2013 has been a pretty strong year for search giant Google (GOOG). Since the start of January, the firm has seen its shares rally more than 20%. But Google is starting to look "toppy" right now, after forming a bearish pattern since the start of the summer. Here's how to trade it.
Google is currently forming a head and shoulders top, a bearish pattern that indicates exhaustion among buyers. The setup is formed by two swing highs that top out around the same level (the shoulders), separated by a higher high in between them (the head). The neckline, depicted on the chart above, is the trigger level to watch -- a slip below that neckline means that it's time to sell (or short) this tech giant.The neckline in Google is currently sloping. That means that as time progresses, the trigger price is dropping -- and so is the downside target if this trade does get kicked off. But we're perilously close to a breakdown this week, so I suspect we'll either see GOOG send out a sell signal or start to completely change its trend. Keep a close eye on this one.
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