Chart Request: Google Inc. (GOOG)
I’ve had a few people mention Google to me last week once it climbed back over $400. It’s almost like people want to buy high & sell higher (gasp!). Steve wrote:
Hi Mike, could you please take a look at Google again. Google looks like is challenging 410 today. If Q2 earnings is good, it should fill 440 gap. But do you think it will keep going if Q2 earnings is good or fall back to earth.
I have no clue what the stock will do post-earnings, which is why I avoid earnings for swing trades. One thing to be careful of is that their guidance (do they give guidance?) will be more important that the Q2 earnings, which is old news. One thing that you can probably bank on (if history is any guide) is that it will have a big gap post-earnings. Whether it’ll be up or down will just depend on how the ‘crowd’ likes what Google has to say. It seems like expectations have dropped a bit, so that may make it easier for the stock to move higher.
What I can say is that I see roughly three areas of resistance above at approximately 20 point increments (see the blue lines on the chart). I’d look for sellers to step in at those levels, especially if the stock gaps to one of those areas.
This post has 2 comments
June 26th, 2006
I agree. I also have been looking at GOOG for a short (although I will look to short HANS first as long as it doesn’t breach its downtrend line).
For GOOG, I see another resistance line, a downtrend line from its recent major highs. Tomorrow, that line will be around 420 or so, slightly higher than the 415 resistance. Nevertheless, I think GOOG will pretty much follow the overall market as most stocks are these days. Few stocks want to be bold and stand on its own while going through this market trepidation period.
Having said that, what the market will precisely do tomorrow is anybody’s guess (my guess is down). But, beyond that, my analysis tells me that the market is about to go way down — deep, deep down; scary down. If that does happen, then as soon as GOOG breaks its uptrend line (~ 384 as of tomorrow), I down’t think it will pause until it fills its 310 gap.
That’s the way I see it. And, although I am often wrong, I’ll play it as I see it until I am proven wrong and then quickly exit. But, for tomorrow, my short candidates will be HANS, ABAX, and GOOG.
June 26th, 2006
One other thing about GOOG’s chart. I did mention the downtrend line and uptrend line, which means it has formed a symetrical triangle. That would suggest that it is more likely to breakout on the upside. But, we shall see. I’m not sure if this market is strong enough for that to happen. Perhaps it may all depend on the Fed this week.