Google is currently trading at $715, up $5.02 or +. 70%, just slightly off the newly established high, but up $2 from its previous 52-week high of $713 established yesterday. The stock has made an incredible move this year, up 9.9% year-to-date as of yesterday’s close. Google is up $158.48 or +28.47% from its 2012 low of $556.52, where it established a bottom, on June 14.
Every time the stock kissed the $556-558 area, it bounced higher. The bears failed to penetrate the $556.52 low several times in the month of June, creating a textbook double bottom, resembling a ‘W’. This ultra-bullish indicator gave traders the confidence to bid the stock back up 50 points to $600 a share on July 5th. However, the stock did pullback briefly to $562, but failed to touch the $556 low, validating the June 14 bottom.
The stock then started a new trend of consolidating sideways with an upward biased before making an explosive move higher.
The stock shot up 26 points from $583 to $609 on July 19, after trading sideways. Google moved sideways again, trading with little direction for a week before making another leg higher.
The stock shot up 20 points to $634 from $614 on July 27. The stock continued to exhibit similar behavior throughout the month of August, consolidating sideways before having another strong move higher, advancing 16 points to $659 from $643 on August 13.
The stock moved gradually higher for the second half of August, before shooting up 12 points on September 6, to close at $694 from $682. With the stock making a new 52-week high under the radar of most traders, I expect an upcoming consolidation period before making the next leg higher.
The stock is clearly in an uptrend. The bulls are looking to carry the stock higher.
The company is set to report earnings October 10, 2012. Google reported 2nd quarter 2012 earnings of USD 10.12 per share on 7/19/12. This beat the consensus of USD 10.04 by USD 0.08 of the 29 analysts covering this company causing the 26 point move mentioned above.
Market is clearly bullish on Google’s growth opportunities, specifically in mobile revenues, which have been a big driver of growth for the company.
Ciro J. Lama is currently an undergraduate studying Finance at the Zicklin School of Business – Baruch College
Website: CantalinoAssetManagement.com
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