After hitting an all-time high of 1289.04 on April 29th, the Google Class C stock opened the following day with a large negative gap, below the prior uptrend line drawn from the low of December 24th. Then, the stock took the down road, printing lower highs and lower lows below a new tentative downside line taken from the stock’s record peak. As long as this is the case, we would consider the near-term picture of this share to be negative.
This Monday, Goggle gapped down again, hit support at around 1025, and then it rebounded somewhat. However, the rebound was short-lived, below 1060, and then the price turned back down. As we already noted, the short-term outlook appears to be negative, but in order to trust further declines, we would like to see a decisive dip below 1015, a support defined by the lows of January 2nd and 3rd. Such a move could set the stage for bearish extensions towards the 972 area, near the lows of December 21st and 24th.
Looking at our short-term oscillators, we see that the RSI rebounded from its oversold territory, but then flattened near its 30 line, while the MACD, although below both its zero and trigger lines, shows signs of bottoming. These indicators suggest that the stock could rebound again from near 1025, and that’s why we prefer to wait for a break below 1015 before we get more confident with regards to further declines.
On the upside, we would like to see a clear close above 1092 before we start examining whether investor-interest for this stock is back. Such a break would also drive the price above the aforementioned tentative downtrend line and could initially pave the way for the 1122 zone. Another break, above 1122, could extend the recovery towards the 1150 or 1157 zones, defined by the highs of May 22nd and 28th respectively.
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