Technical Analysis – Google stock on track to revisit 100-SMA after a bounce on 38.2% Fibo level


Anthony Charalambous, XM Investment Research Desk

Google stock price found strong resistance from the 100-day simple moving average (SMA), coupled with the Ichimoku cloud’s upper boundary and the 50.0% Fibonacci retracement level of the down move from 1288.47 to 1024, of 1157. Price moved into the Ichimoku cloud on July 10 and adopted a sideways motion.

The positive directional momentum has dwindled, as the MACD flattens near the trigger line, and the RSI remains near the 50 level but is slightly rising. The ADX continues to show the strong bullish trend. Moreover, the 20-day SMA is above the 40-day SMA and the latter is starting to turn up.

Currently, the stock price is holding between the 38.2% and 50.0% Fibo levels, while further advances would require the fracture of the fortified barrier of 1157, and a jump above the upper boundary of the Ichimoku cloud, before the 61.8% Fibo of 1187.80 could be tested. Then a breach of the 1190.90 resistance could open the door to 1230.80, before the all- time highs come into focus.

To the downside, the 38.2% Fibo of 1124.50 and the 20-day SMA around 1120 would need to initially open the way for a test of the support at 1107.45, which overlaps with the 40-day SMA and the uptrend line. Once breached, the lower boundary of the Ichimoku cloud and 23.6% Fibo of 1087 are up for grabs.

Overall, the bullish bias is still dominating, but caution to a break below the long-term trendline around 1043 area, could start a bearish shift.