After its recent sharp selloff, Google shares are showing signs of a recovery as the price bounced off a key support zone near the $500/share level. MACD is reflecting a buildup in buying pressure, as the indicator just crossed out of the oversold area.
At the same time, RSI is hinting at a return in buyers, as the oscillator also started to climb. This could push Google shares to the next area of interest at the $560-$580/share level.
Google Shares Outlook
If the $560/share level holds as resistance though, Google shares might resume their drop and test the previous lows near $500/share. After all, the return in risk aversion has taken a huge toll on US equities, especially as the Ebola outbreak and geopolitical tension are still weighing on price action.
A climb past the $580/share level would confirm that more gains are in the cards and that Google shares could stay on track to test the previous highs past $600/share. A strong wave in buying momentum, although unlikely, could even push prices to new highs before the end of the year.
The FOMC’s change in stance has dampened risk appetite recently, with constantly shifting economic factors and the possibility of deflation keeping traders from taking on more risk.
Weak revenue reports from Google also weighed on its shares the other week, leading to a streak of losses for its stockholders. Google’s adjusted earnings per share were $6.35, while analysts were hoping for $6.53. Its $16.5 billion in revenue also missed the expected $16.6 billion, leading to a 3% decline for Google shares that day.
Last week, the company released a Chrome app called Inbox, but this wasn’t met with positive reviews. Analysts have dubbed this as a “glorified shortcut”, saying that it wasn’t exactly groundbreaking, much to the decline of Google shares.
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