Google Class C Stock traded lower on Friday, after it hit resistance near 1232 on Thursday. Since December 24th, the stock has been printing higher peaks and higher troughs within an upside channel and thus, we would consider the near-term outlook to be positive. Even if it trades a bit lower, as long as it remains within the channel, we will consider any further downside extensions as a corrective phase.
A dip below 1200 would confirm the case for some further retreat and may allow the price to drop towards the 1177 level, marked by the low of March 18th, or the lower end of the aforementioned upside channel. At those levels, investors may take advantage of the somewhat cheaper stock and perhaps push it back above 1200. Such a move may open the way for another test near Thursday’s high of 1232, the break of which would confirm a forthcoming higher high and may allow extensions towards 1255, a resistance zone defined by the peaks of August 8th, 9th and 30th. Another break, above 1255, may encourage investors to put the stock’s all-time high of 1272.36 on their radar.
Shifting attention to our short-term oscillators, we see that the RSI topped within its overbought zone and moved back below 70, while the MACD, although above both its zero and trigger lines, shows signs that it could start topping. These indicators suggest slowing upside momentum and corroborate our view for some further retreat before the next positive leg.
That said, in order to start examining whether the near-term outlook has turned negative, we would like to see a clear and decisive break below 1170. Such a dip would signal the downside exit out of the aforementioned channel and may lead the stock lower, towards the low of March 8th, at around 1120. If that level fails to halt the slide, then we may experience extensions towards 1100, near the lows of February 26th and 27th.
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