Thursday, February 6, 2014

GOOG Google Weekly Chart Rising Wedge Overbot Negative Divergence

Google has been a darling for long traders, and rightfully so, simply look at the upside orgy over the last 4 months. Looking back, most of you remember the top calls last summer, which occurred, but GOOG never pulled back to any significant extent, like the broader market. The hype around google glass has gotten everyone excited as well as Google perhaps filling a cutting-edge technology void created upon Steve Jobs death. The good feelings, hope, aspiration, and hyped news will only get you so far. A lot of the wearables, the google glasses and so forth, may be a harder sell on the general public than thought.

At any rate, price is far extended above the moving averages requiring a mean reversion. The rising wedge, negative divergence and overbot conditions are ready to create a spank down. Note, however, the MACD line has one more ounce of strength wanting to see a matching or higher high again, after an initial pull back occurs, but it is quickly running out of gas, and will negatively diverge locking in the last piece of the puzzle for bears. The buying volume shows less interest as price moves higher. If you are a speculative trader, and thinking about shorting such a momo monster, the time is nigh where a short side play may be prudent for king google. The top is likely one week away, or two, but a short position can likely be entered now with other scale-ins allotted.

The 1180 should hold on the top side. A pop higher tomorrow may afford good timing to enter short. If GOOG runs higher above 1180 and 1190, price may want to print in the 1220's to create the top but at this time this outcome is not expected. Projection is for GOOG to top out over the next 1 to 3 weeks, probably next week, perhaps at 1180-ish, and then roll over for sideways to sideways lower for the remainder of the year, perhaps placing the top for the year over the next month. This information is or educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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