Google Inc (GOOG) had a heavy sell off after it missed earnings three weeks ago. The earnings related sell off resulted in a large downside gap in the stock. Since the downside gap took place, GOOG has been trading in a sideways consolidation pattern.

The consolidation pattern has shown support at approximately 505, and resistance right at the gap bottom resistance level of 520. Today's market strength is pushing GOOG higher, causing another test of 520 gap bottom resistance. If GOOG managed to push above 520 resistance, it is likely that the stock will continue moving further into the gap. Watch for a 520 resistance break here, it may result in a favorable long set up.



Andy Swan is co-founder and head trader for DaytradeTeam.com. To get all of Andy's day trading, swing trading, and options trading alerts in real time, subscribe to a one-week, all-inclusive trial membership to DaytradeTeam by clicking here.