Google Sets Up For Fall Below $300
This morning shares of Google (GOOG) fell through key short term support at $325 a share. The stock has been trading within a 50 point range for the last several weeks and a close today under support could signal the start of a fresh 15% move lower.
All short term investors should be closely watching two key elements with Google’s stock today which will help to affirm direction: volume and the closing price.
High above average volume (distribution) gives the move credibility as it would signal institutions are involved. And for bears a close right near session lows today increases odds that the move will continue tomorrow.
To estimate where Google might receive support next simply take the average range top to bottom of the current horizontal channel (around 50 points) and subtract that from the key support point of $325. This leaves us with a target price for Google of about $275 a share.
Google’s stock chart below (6 month, daily):
The sustainability of any move up or down short term weighs heavily on the overall market. In the current bear market odds favor shares selling to the downside. Thus playing a stock like Google off a technical breakdown can result in quick profits for the smart investor.
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