Google has set fresh 52 week lows today and looks to go much lower if the current trend isn't reversed immediately.
This crash in Google presents questions for investors. What if you own at a higher level, do you hold or sell? Do you buy more?
What about those that do not have a position in Google? Is now a good time to buy?
For those in both camps - the answer is the same - let's go to the charts.
The first chart shows Google entering a pronounced downtrend - with successive lower highs and lower lows - a telling bear sign. By all accounts - the most likely direction of this stock in the short term is down. So, how far down and when can an investor start buying?
This crash in Google presents questions for investors. What if you own at a higher level, do you hold or sell? Do you buy more?
What about those that do not have a position in Google? Is now a good time to buy?
For those in both camps - the answer is the same - let's go to the charts.
The first chart shows Google entering a pronounced downtrend - with successive lower highs and lower lows - a telling bear sign. By all accounts - the most likely direction of this stock in the short term is down. So, how far down and when can an investor start buying?
Looking at the year chart, we can see how far Google has fallen. Based on this chart - we go south. To see how much, look at the final chart below.
This five year chart of Google shows a very telling move in the stock - from 425 to 525 - largely without any tests. Why is that important? Because on the way down, stocks tend to test resistance points. And Google doesn't have any test points between 500 and...425. So, quite likely, the stock could drop into the mid to low 400s. It's not crazy to suggest we could see a 3xx print in the near future.
When Apple went through a similar decline, I advised patience and discipline. Don't rush in unless you weigh the risks and rewards. Buying now isn't a huge mistake long term in my opinion, however, you may see wild short term fluctuations in the price of the stock. Keep that in mind if you put money to work here. Buying a crashing stock can be quite lucrative, but also put your investment chops to the test.
When Apple went through a similar decline, I advised patience and discipline. Don't rush in unless you weigh the risks and rewards. Buying now isn't a huge mistake long term in my opinion, however, you may see wild short term fluctuations in the price of the stock. Keep that in mind if you put money to work here. Buying a crashing stock can be quite lucrative, but also put your investment chops to the test.