u s shares highlights google inc 194132015

Google Inc (GOOGL) – “Bottomed out” for a potential multi-month upside movement

Since hitting a record high of 615.04 printed on 26 February 2014, Google Inc. has tumbled by 19% and underperformed the broad market in 2014 as the benchmark S&P 500 index soared to an all-time high of 2093 seen on 29 December 2014.

In additional, its recent Q4 2014 earnings release on 29 January 2015 came in below expectations, making it the fifth consecutive quarter of “earnings misses”.

However from a technical analysis perspective, Google may not be in such a “bad shape”. Let’s us review its latest technical elements.

Key elements

• The recent swing low of 12 January 2015 has managed to stage a rebound at the 497.17 pull-back support (in light blue) of a former long-term ascending channel breakout on 12 January 2015 (see weekly chart).
• The 497.19 support also confluences closely with a Fibonacci cluster (see weekly chart).
• The long-term (weekly) RSI oscillator has just broken above its former trendline resistance coupled with a bullish divergence signal seen before the bullish breakout (see weekly chart).
• Price action has just broken out of a bullish “Inverse Head & Shoulders” reversal formation’s neckline resistance at 543.93 after a 19 % decline seen from its all-time high of 615.04 printed on 26 February 2014.
• The exit potential of the “Inverse Head & Shoulders” bullish breakout stands at 597.20.
• The intermediate term MACD trend indicator continues to exhibit bullish characteristics as it inches upwards above the centreline

Key levels (1 to 3 months)

Pivot (key support): 512.35

Resistance: 597.20/605.10

Next support: 497.19 & 453.94

Conclusion

The multi-month bearish trend for Google in place since 26 February 2014 high has started to show signs of “bottoming out”. As long as the 512.35 monthly pivotal support holds, Google is likely to see a recovery towards 597.20/605.10.

However, failure to hold above 512.35 may see a retest of the significant support at 497.19 and only a clear break below it is likely to see a deeper decline towards the next support (gap) at 453.94.

Source:  Charts are from eSignal

Disclaimer

The information contained in this material is intended for general circulation only.  It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs.  Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.  All queries regarding the contents of this material are to be directed to City Index Asia Pte Ltd.