Google traded lower on Thursday, after it hit resistance near the 2860 zone. However, the slide was stopped near 2755 on Friday, and then, the stock rebounded somewhat. Overall, Google is trading below a downside resistance line taken from the high of November 19th, as well as above another downside line, drawn from the low of November 10th. All these consist to a broadening formation and therefore, as long as the stock remains between those two lines, we see decent chances for another leg south.
A clear break below 2755 could confirm the case and may initiate declines towards the low of January 10th, at around 2665. Some buyers could join in there, but if they are not strong enough and abandon the battle from below 2755, we could see another round of declines, and eventually, a break below 2665. Something like that could see scope for extensions towards the low of October 4th, at 2620.
Our short-term oscillators detect downside speed, but there are signs adding to our choice of waiting for a dip below 2755. Both are below their respective equilibrium levels, but the RSI is currently flat, while the MACD lies above its trigger line.
On the upside, we would like to see a clear break above 2930 before we start examining whether more participants are willing to add the stock to their portfolios. Such a move could confirm the break above the downside resistance line taken from the high of November 19th and may see scope for advances towards the peak of December 9th, at 2982. Another break, above 2982, could allow another test at the stock’s record of November 19th.
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