GOOG at $600 Resistance Level

After losing 50% in 2008, Google has performed really well in 2009. It has regained most of its loss from 2008 and currently is at a critical point at $600. $600 is a resistance level going back to mid-2008, the last time GOOG was trading at this level. One thing to note is that GOOG has been trading up in 2009 with decreasing volume and the volume has been declining even more since October. Also, keep in mind that those who own GOOG will start taking profits at this level. There is a good chance that GOOG has reached its peak short term and will head lower from $600. But, be careful because if S&P500 breaks its 50% retracement level at $1120, then GOOG will continue its upward movement along with the stock market. At this level, I would take the risk and SHORT GOOG with a tight stop-loss.

UPDATE on 12/24/09:
It looks like GOOG has cleanly broken its 50% retracement level.  I took the risk and shorted GOOG but fortunately my stop was very tight so I did not lose too much money.  Although GOOG could continue to go up from here, I am expecting it to eventually retrace back to $600 again to test now the support line.  Good luck everyone.

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