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Google in a Glance

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Reassessing the company's potential after earnings.

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Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial).

The charts have given us long and short trading opportunities in Google (GOOG) in the past few months. (For more, see my Buzz notes posted on 3/24, 3/2, 2/24;note that a subscription is required). I tend to not have any trading positions in the stocks before earnings, but after the earnings are announced, it's always good to reassess potential technical trading scenarios. What does the current chart of Google say? With Google currently at 556.5, here's what I see.


Click to enlarge


1. Too many gap-downs in the past few months.

2. The stock doesn't have much respect for its 50-day MA.

3. First technical support in the mid-540s.

4. Inability of the stock to muster any bounce today coupled with heavy volume shows that Google holders might sell any bounce toward the 580 zone. Currently, this stock is charged with strong emotion on both sides, so it's prudent to respect that and handle it as you would handle a crisis!

5. There is a support zone between $526 and $530, which is quite strong given that the 200-day moving average is lurking there. Also, this is an area of lateral support. And that is an area where buyers might step in for a lasting long trade.

6. And lastly, as I shared on February 25, while it's prudent to pay attention to leaders, it's also important to not solely rely on any one stock or a group of stocks to color overall market perceptions.
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No positions in stocks mentioned.

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