Today I’ll show a couple charts for Google (GOOG), which I am accumulating in my retirement account. My strategy with Google is to get as many shares as possible as cheaply as possible. I have some targets where I’d be stupid not to sell, but in general GOOG prices stay fairly valued to my estimates. I buy on the dips.
Above is a 6 month chart. There is support at around $560 and resistance above around $670 and the all time highs. I drew an optimistic support line there on the short term trend. You’ll see below that this trend has some data points further back too.
GOOG is hitting an inflection point now as the 200-day moving average approaches the all time highs. In the short term, I wouldn’t be surprised to see it trace back to the 50-day MA or the 200-day MA. If it does, I plan to load up at around that $590 point and if it goes lower.
Here is a 3 year chart showing the longer term trends.
(Note: the moving averages are different because this chart is showing weekly candles vs. daily.)
Notice that my optimistic trendline on the 6 month chart shows up here going back to last May. The inflection point with that trend and the resistance at $650-670 is much more start kere.
If the market stays strong and GOOG’s next earnings are decent, I think the stock could pop here and ride out for a bit… setting new support at the $650 level. I think it just as likely that the stock goes down into the $500 and high $400 range again, which would be great as I could accumulate more. Note that GOOG has had pull backs the last two summers.
Fundamentally, there doesn’t appear to be any reason that Google won’t continue to hit their numbers and post good earnings. Sure Apple, Facebook, and Microsoft are competing in search. But at the moment, it seems that Google is doing better competing on their turfs than they are competing on Google’s.