GOOG technical weakening should bring good pullback soon; prepare for that AND the next buy point

Google's stock price (GOOG) has continued upward as a stalwart of the Internet sector and even the S&P 500 index. However, it's now experiencing negative divergence as its technical indicators weaken. This is shown by the first chart below. It's also already met a default P&F target of $544 (bottom chart). This portends a pullback at least, so it's a good idea to be on guard and start considering hedging or other strategies. There's certainly a rising 200-day moving average to provide support in the $400's. And it could get there - I also checked Tony Caldaro's public charts at his OEW site (see in sites list at right - thanks again, Tony!), daily and weekly below. Despite an extended fifth wave move, it should be nearing the crest of what would be wave I in Objective Elliott Wave terms. A trend reversal to move down in wave II must be confirmed by a reversal pattern. But if my wave counting is anywhere near right, that wave I crest should be very close.

There's also price resistance as you can see in this area, looking at the prior swing high before the panic low. It's another reason to be alert for a reversal.

A price target for a wave II down can be in the $400's and coincide with testing the 200-day moving average. It's true it could go deeper, since second waves often retrace about 62% or 70.7% of the first wave move. But that doesn't always hold true, especially in a strongly trending move. This particular wave I and II are within the context of a larger wave [3] according to Tony's view - which looks right to me. This implies a strong uptrend, so the wave II may not go as low as bears might wish. Although note, the psychology of second waves is they make you feel their movement is a return to the prior trend (i.e., in this case, a return to the big bearish downtrend). At any rate, consider looking at a move toward the 200-day MA, along with what the P&F objective is showing by then.

Once the wave II pullback shows up and completes after some weeks, then GOOG should provide its best swing long yet, because a wave III of [3] should vault well above the old wave [1] already notched. (Third waves often travel at least 1.618 the length of the first wave - that's one of the reasons I focused on $1192 in gold.). So by the time GOOG completes its wave II pullback, which might be in a couple of months, get ready to put some of your KI$$ portfolio in it (wonder if they'll finally do a stock split by then? not that it would make any difference!).