Technical Analysis – Google’s gains slip through fingers as sellers correct back down

Anthony Charalambous, XM Investment Research Desk

Google stock collapsed from 1264 to 1139 after nearly revisiting the high of 26 July 2018 of 1269, evaporating all gains from the bullish gap of July 26 of this year. The price moved into a sideways market with upper and lower boundaries of 1203 and 1146 respectively.

Despite the latest correction and consolidation phase, the incline since June 3 has painted a positive picture, something also reflected by the momentum indicators remaining in bullish territory. Furthermore, the 50- and 100-day SMAs have completed a bullish cross, fortifying the bullish sentiment.

Moving higher, the upper boundary of 1203 would provide initial resistance, before the swing high of 1231 from March 23. A sustained run up could pave the road for the resistance region of 1264 – 1269. Overcoming the region could draw the attention of the all-time-high of 1288.47.

If selling interest picks up, support could come from 1157, which is the 50.0% Fibonacci retracement level of the down leg from 1288.47 to 1024, and where the 50- and 100-day SMAs overlap. Overcoming the region could plunge the price lower than the 1146 lower boundary as well as the 1139 support, bringing price to rest at the 38.2% Fibo of 1125. If bearish dynamics dominate, the 1069 support where the uptrend line coincides, could draw focus once the 1107 swing low and 23.6% Fibo of 1086 are surpassed.

Overall, the neutral-to-bullish bias in the short-term still endures and a close above the 1264 would confirm it. However, a close below the 1069 level could shift the medium-term back to neutral.