After finding resistance at the 50 simple moving average on the daily time frame, Google shares have undergone heavy selling pressure lately. Price has fallen back to the previous month lows near the $500/share level and may be due for more losses.
MACD is pointing down, reflecting that sellers are in control of price action for the time being. A break below the $490-500/share level could confirm that Google shares are in for longer-term declines. RSI is also headed south and indicative of a buildup in selling momentum.
Google Shares Forecast
A bounce off the previous lows could mean short-term rallies for the stock though, as it could make another test of the 50 SMA dynamic resistance. A break above this area could confirm that the selloff is over and that an uptrend might take hold.
The recent FOMC minutes turned out negative for US equities, as it suggested that the Fed is still looking to tighten monetary policy sometime this year. While the report indicated that rates will stay low until April or the second quarter of 2015, businessmen project that credit conditions will be stricter and that investments will be more expensive should the Fed start hiking rates later on.
Google shareholders and officials have sold some of their holdings recently, contributing to the decline in share price. Sergey Brin sold 83,294 shares of the company’s stock on the open market on Tuesday while CFO Patrick Pichette sold 1,222 shares of Google stock.
Despite that, several analysts still retained their “buy” recommendation for Google stock, especially since share prices are hitting market bottoms. A rally from the current levels could mean a move back to the $530/share levels if risk appetite picks up.
An event risk for this share is the upcoming NFP release on Friday, which would indicate if the momentum in the US jobs market is being sustained or not.
To contact the reporter of the story: Jonathan Millet at email@example.com