After the close yesterday Google anounced its latest earnings number. It didn't meet the Street's expecations so GOOG was crushed, dropping as low as 350 in after-market trading as you can see from the hourly chart above this post.
GOOG has been the market's leader for the past 18 months. Its big break on earnings news will be an important "test" of the bullish underpinnings I think I see. I think the principle of the "Dog That Didn't Bark" comes into play here. One naively would expect the general market to take it on the chin after one of its leaders gets crushed. If instead the averages rally (as I expect the S&P futures to do from 1280 support) then this would be a very postitive indication of higher prices ahead.
As for GOOG itself, I must observe that typically a bear market in a stock does not start with a break like this resulting from a minor earnings disappointment. Note that GOOG stopped just above the 3 5/8 multiple of the all time low price of 95.96. It then rallied to the 4 1/8 multiple. I expect it to bounce between these levels for a while, but I do think that GOOG will reach 495 before its move up from 96 ends.
1 comment:
I do not think you are correct regarding GOOG, competition is moving in quickly by companies that have been in the game for much longer. YHOO is a huge threat IMO.
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