See previous blog of July 7th. The stock did not wait long and decided today to continue it’s trek down by about $7 or 16%. If this gap is the midpoint of a third wave, $31 might be next ( this would also make wave 3 approximately 1.618x wave 1 ) but the ultimate target is more in the order of $15/$10, again see previous blog.
Google is a very interesting stock. Normally I would not attempt to venture a guess where this is going. Eye-balls and that kind of stuff is not my cup of tea. As a matter of principal I would never buy a stock that trades at $500 , whatever.
The chart is intriguing so I will hazard a guess. The stock should go down. The initial drop from $750 to $240 is either an A-B-C move or 5-waves, I prefer the former but is does not matter much. If it was an A-B-C that could have been it and a new bull would have started and it could be argued that the initial move back to $630 was wave 1 up and everything thereafter wave 2 down. The internals do NOT support this. On the detailed chart there are two 5-wave moves of almost equal size. They channel well. Therefore the mid leg cannot be a b in a wave 2 and must therefore be a C of the correction. The next 5 waves then has to be a wave 1 down (followed by a nice wave 2 a-b-c, mostly on news, stellar earnings). If correct the next move should be 3 down! Time will tell.
This is one that keeps going and going, mostly sideways. Here are the old charts;
This wedge would allow for a top near $57, but this stock appears propelled by financial engineering and the love of our largest brokerage firm, even if it has exceeded even their (then) lofty targets. $55 seemed like a good top. Perhaps not;
For about 4 months this stock has done nothing. Except it has gone from one side of the channel to the other. Usually it does not pay to short a dull market. this would certainly be the case if this were a 4th wave triangle which targets a price of about $56/57, right on the target. Keep a tight stop on this one and if it does get to $55+, sell it. Both the RSI and MACD do not look very promising.
In EW terms the original chart may have had a 1-2 too many. Taking it out puts you in wave 4 of the entire sequence. If this is a triangle it has to be a wave 4.
This was back in Febr. 2011. The stock was trading at a P/E of 56, not that that matters. The chart showed a very , very, clear A-B-C corrective retracement of the big drop. Furthermore, it retraced a rather intriguingly precise 62% and reached the wave 4 or wave B level. I have shown dozens of these together with at least as many B-waves. Sometimes they remain suspended for months, sometimes they go a fraction higher but in most cases they will do the expected. Here is today’s chart;
The stock has dropped from $26 to just above $14, roughly 46% in 4/5 months. The P/E is no longer at 56 but at a more moderate 34 (still high according to the value investors that look for a P/E <10). On this move the stock might reach $10 where it hits the line and coincidentally again retraces 62% of the retracement. It may not quite get there in this bullish environment. In the end the stock could drop to $3 or so but if it does, it is unclear how it does it, so I would suggest leaving it alone at around $11.
I have no idea what this company does other than that it is in the semiconductor business. A look at the SOX index may add light to this analysis.