Google shares have been on a strong rally at the start of the month but retreated upon testing resistance near the $580/share level. Price has pulled back to the 200 SMA on its daily time frame and might find support at this area, which is near the $550/share level.
MACD just reached the overbought level and is turning lower, indicating that a selloff might take place. RSI is also showing a pickup in selling pressure, as the oscillator is heading south from the overbought area as well.
Google Shares Outlook
This could offer buyers a good price to get in their long trades, as Google shares could bounce off the longer-term or shorter-term moving averages, which have acted as dynamic inflection points. If so, the stock could continue with its climb and possibly break past the recent highs around $580/share.
A sharper decline, on the other hand, might lead to a move towards the key support area at $500/share, which has held as support early this year. Risk sentiment is playing a role in determining price action for Google shares recently, as speculations of Fed tightening in June have weighed on higher-yielders and equities.
A pickup in risk appetite would support more gains for the stock price, which might make its way closer to the $600/share major psychological resistance level in the near term. For now though, the retirement of Google’s CFO has weighed on the share price and might continue to do so until a significant catalyst allows the rally to resume.
Google CFO Patrick Pichette is set to retire soon and that transition will occur over the next six months. This could lead to some concerns on company revenues and profitability, probably dragging share prices much lower for a few months. Apart from that, the recent Apple announcement has weighed on the outlook for Android devices and led to a drop in Google shares.
To contact the reporter of the story: Jonathan Millet at firstname.lastname@example.org