GOOG has been on a tear in the past 3 months, moving more than 20% higher from its Nov 16th intraday low. The stock is making a convincing new all-time high today, which is particularly impressive for a $250 billion market cap company. GOOG’s recent earnings report on Jan 22nd was the trigger for the recent move higher, but GOOG has no doubt been a beneficiary of tech investors looking for the next large-cap growth stock, a la AAPL in 2012, where they can partake in a strong momentum run.
Looking at the lifetime chart, we can see the significance of the recent breakout:
I’ve drawn a red line around the previous 2007 highs around 750. GOOG initially broke that level in the fall, only to fall back below it after a weak earnings report in October. However, the stock has worked its way back above that level, and to new highs today. The 750 area should be an important level of support.
One interesting aspect of the above chart is the lower panel that shows the stock’s volume. The first 2 years of strong volume are understandable as a new investor base got involved in the stock. However, it is a bit surprising nonetheless to see such tepid volumes over the past few years, even as the stock makes new all-time highs. I generally view price action as more important than volume, but worth noting the light volume on GOOG.
GOOG’s breakout in September to new highs held for about a month. So it’s not necessarily an easy trade to get long GOOG here simply because it’s made a new high. But the longer GOOG can hold the breakout level of 775, the more likely the stock is to attract momentum players looking to jump on the euphoric bandwagon.