Thursday, July 15, 2010

GOOG Disappoints

GOOG disappointed after hours and the stock is down about $20. In some respects, this was not at all a surprise. The chart had already portended a possible reversal as the rally from the July 1 low completed this afternoon as an impulse - at least it appears to be one, and we already have the broader markets in the beginning stages of a pullback. However, Google probably still has upside potential with a target around its February low and the upper downsloping channel line. Barring a sudden change in character and a breakout above the channel line well in advance of the expected late August top in the markets, that is the most we should expect. A 50% retracement of the overall decline is a fairly common occurence. With the confluence of resistance just below that level, a fake-out breakout bull trap would not be surprising.

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