On The Downswing - Lower Prices
That’s right, GOOG is giving up some of those gains.
Step back for a minute and consider that the stock has run up more than 100% since going public. A little correction is more than overdue.
Google clearly broke through support today. The stock even gave traders another chance to exit long positions near the $190 level later in the day.
Guess where the stock found a low today?
Near the 62% price extension level. See the chart linked below.
Note: The price extension is the difference between the swing low at $190.60 and the swing high at $201.60 multiplied by Fibonacci ratios and then subtracted from the low.
Also, if the stock continues down from these levels, the next likely support level is at the 100% extension level at $179.60.
What also makes this a likely level of support is $180.00 is a previous low.
If the stock closes below $180 tomorrow, I’ll post another chart showing the next likely level of support …
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It’s going to be really interesting to see how the sequences hold out as Google stock becomes
available to trade in blocks over the coming months. As we know, right now only 10% of eligible
stock is actually available to trade with 270M shares being locked up.
As Nov 16th (39.1M), Dec 15th (24.9M), Jan 16th (24.9M) and finally a massive 176.8M on February
14th 2005 are reached - it will be interesting to see how the sequence holds out.
See following article for details…
http://www.reuters.com/newsArticle.jhtml?type=internetNews&storyID=6705518
Comment by Robin Yearsley — 5 Nov 2004 @ 7:49 AM EST