GOOG's Outside Day

Last night Google (GOOG) reported better than expected earnings and the stock 'gapped higher' out of the gate this morning. However, the opening print was near its session high, and GOOG spent the rest of the day heading lower.

The result was what technicians sometimes refer to as an 'outside day'--where the session high is higher than the previous day's high, and the session low is lower than the previous day's low. (btw, here's a nice tutorial if you're having trouble making sense of candlestick charts)

When outside days occur after a trend as been in place (GOOG has been in an uptrend), and when the close of the outside day is opposite the trend (GOOG closed lower), then that often portends a trend change--particularly when the outside day occurs on big volume (it did today).

Because many traders consider this stock a key 'tell', or indicator, of general market strength, GOOG's price action over the next few days may be worth watching.

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