Although most of my analysis is fairly easy and straight forward, indicators are not the only things I look at.

Studying Japanese Candlestick charting patterns play an important short-term role in timing trades. On this one-year daily chart of Google (GOOG) you will see that I have drawn two lines that come together at a point. We technicians refer to this formation as a symmetrical triangle pattern. It can be either bullish or bearish depending on what the stock has done prior to the pattern. In this case, Google had been surging back north before pausing. Basically, this triangle formation is simply an intermediate step, or consolidation if you will, before the next big jump.

Couple this consolidation pattern with the fact that Google is reporting its fourth quarter earnings and you have a calming before the storm. This scenario occurs all too often and may hint that investors are expecting great results.

01/29/06 – Oppenheimer analyst A. Sasa Zorovic, citing Google’s Internet search market share gains in December, increased his price target for the stock to $550 from $540. (Bigcharts)

This certainly looks welcoming, as this is not the only analyst in the bunch that believes Google is heading for $550 plus. Normally I am not a big fan of analysts, but if their analysis agrees with my technical research, I will be more than happy to receive the added bump in price.

So, if this analyst has increased Google’s price target why is the stock trading flat?

Again, you have to respect the technical setups because it is rare that they are broken prematurely. Those who expect to understand a security’s movement by the news are going to be consistently confused and disoriented in regards to their trades. This is because some news is expected, other news is not, some news is leaked, and others are ground breaking and fresh.

Stock news comes in all shapes and forms.

The only way to understand what is happening behind the scenes is to actually know the charts and patterns so you can easily identify whether a stock is consolidating, breaking out, or is about to break out.

Scroll down to the bottom of this blog and read up on my section called “Charting 101″ to get a beginners’ feel for some of the candlestick charting patterns discussed in this post.

Good Investing…