GOOG shares have recently made an upside break past a complex double bottom pattern and made a pullback to the broken neckline resistance. Share prices seem to be gaining upside momentum again, as the support area held.
Prices could go back up to the previous highs near the $580/share area and beyond. The broken neckline resistance lines up with the 38.2% Fibonacci retracement on the latest swing low and high and the 200 simple moving average on the daily time frame. This confluence of inflection points could keep any losses in check.
GOOG Shares Forecast
Sustained buying momentum and the return of risk appetite to the financial markets could keep the uptrend intact and push GOOG shares to new highs, possibly until the $600/share psychological resistance. After all, the FOMC statement indicated that the US central bank is likely to keep interest rates low for a bit longer.
While the central bank confirmed that they are considering tightening monetary policy, their downgraded growth and inflation forecasts suggest that they might wait until September to hike rates. This is later than previous market forecasts of a June Fed rate hike, which set off risk aversion and a selloff among US equities in the earlier months.
As it is, US equities seem to be reacting positively to the Fed bias, as companies expect cheaper credit to support consumer spending and business activity. This could pave the way for another quarter of strong earnings data, which would lead to better consumer confidence and more positive business trends.
Investors are also expecting more upside for GOOG shares, as some expect the company stock to outperform its tech peers. Some speculate that Google will start paying dividends, which would boost demand for the stock and lead to a price rally possibly until $680/share soon.
To contact the reporter of the story: Jonathan Millet at firstname.lastname@example.org