Here’s a preview of what I’ll be discussing on Talking Numbers today between 3:20 and 3:30 pm EST on CNBC:
GOOG has had a tough time rallying with the market ever since its weak earnings report in July. It went from a market momentum leader to an ignored behemoth. The stock has now reached an important inflection point.
This is a daily chart of GOOG in 2013:
GOOG had a very strong start to the year, and is still holding above its March high, around $850 (shown in red). That level acted as support in June, and it is bouncing again from there today.
But there are 2 reasons why I think it’s more likely that GOOG breaks $850 in the coming weeks. First, the stock has shown relative weakness vs. the rest of the market ever since its May high. A poor earnings number didn’t help. GOOG is down near its June lows while the broader indices are all well above that level. Second, the 50 day moving average (shown in yellow) is now downward sloping for the first time in 2013, indicating the change in trend.
Where would I be a buyer? The second, lifetime chart of GOOG is a monthly chart that indicates the importance of the $750 level.
$750 was the high in 2007, and a breakout level for the stock earlier this year. A move back to that area would be an attractive spot for a new long position.