Best of the Week
Most Popular
1.UK General Election BBC Exit Polls Forecast Accuracy - Nadeem_Walayat
2.UK General Election 2017 Seats Final Forecast, Labour, Conservative Lib-Dem, SNP - Nadeem_Walayat
3.UK General Election 2017 Forecast: Conservative 358, Labour 212 Seats - Nadeem_Walayat
4.Theresa May to Resign, Fatal Error Was to Believe Worthless Opinion Polls! - Nadeem_Walayat
5.UK House Prices Forecast General Election 2017 Conservative Seats Result - Nadeem_Walayat
6.The Stock Market Crash of 2017 That Never Was But Could it Still Come to Pass? - Sol_Palha
7.[TRADE ALERT] Write This Gold Stock Ticker Down Now - WallStreetNation
8.UK General Election Results Map 2017 vs 2015 vs Opinion Polls - Nadeem_Walayat
9.Orphaned Poisoned Waters,Severe Chronic Water Shortage Imminent - Richard_Mills
10.How The Smart Money Is Playing The Lithium Boom - OilPrice_Com
Last 7 days
Gold and Silver Ongoing Consolidation May End Soon - 24th Jun 17
Dollar May Become “Local Currency of the U.S.” Only - 24th Jun 17
Sheffield Great Flood of 2007, 10 Years On - Unique Timeline of What Happened - 24th Jun 17
US Stock Market Correction Could be Underway - 24th Jun 17
Proof That This Economic Recovery Narrative is False - 24th Jun 17
Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - 24th Jun 17
Gold Summer Doldrums - 23rd Jun 17
Hedgers Net Short the Euro, US Market Rotates; 2 Horsemen Set to Ride? - 23rd Jun 17
Nether Edge By Election Result: Labour Win Sheffield City Council Seat by 132 Votes - 23rd Jun 17
Grenfell Fire: 600 of 4000 Tower Blocks Ticking Time Bomb Death Traps! - 22nd Jun 17
Car Sales About To Go Over The Cliff - 22nd Jun 17
LOG 0.786 support in CRUDE OIL and COCOA - 22nd Jun 17
More Stock Market Fluctuations Along New Record Highs - 22nd Jun 17
Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - 22nd Jun 17
Green Party Could Control Sheffield City Council Balance of Power Local Election 2018 - 22nd Jun 17
Ratio Combo Charts : Hidden Clues to the Gold Market Puzzle - 22nd Jun 17
Steem Hard Forks & Now People Are Making Even More Money On Blockchain Steemit - 22nd Jun 17
4 Steps for Comparing Binary Options Providers - 22nd Jun 17
Nether Edge & Sharrow By-Election, Will Labour Lose Safe Council Seat, Sheffield? - 21st Jun 17
Stock Market SPX Making New Lows - 21st Jun 17
Your Future Wealth Depends on what You Decide to Keep and Invest in Now - 21st Jun 17
Either Bitcoin Will Fail OR Bitcoin Is A Government Invention Meant To Enslave... - 21st Jun 17
Strength in Gold and Silver Mining Stocks and Its Implications - 21st Jun 17
Inflation is No Longer in Stealth Mode - 21st Jun 17
CRUDE OIL UPDATE- “0.30 risk is cheap for changing implication!” - 20th Jun 17
Crude Oil Verifies Price Breakdown – Or Is It Something More? - 20th Jun 17
Trump Backs ISIS As He Pushes US Onto Brink of World War III With Russia - 20th Jun 17
Most Popular Auto Trading Tools for trading with Stock Markets - 20th Jun 17
GDXJ Gold Stocks Massacre: The Aftermath - 20th Jun 17
Why Walkers Crisps Pay Packet Promotion is RUBBISH! - 20th Jun 17
7 Signs You Should Add Gold To Your Portfolio Now - 19th Jun 17
US Bonds and Related Market Indicators - 19th Jun 17
Wireless Wars: The Billion Dollar Tech Boom No One Is Talking About - 19th Jun 17
Amey Playing Cat and Mouse Game with Sheffield Residents and Tree Campaigners - 19th Jun 17
Positive Stock Market Expectations, But Will Uptrend Continue? - 19th Jun 17
Gold Proprietary Cycle Indicator Remains Down - 19th Jun 17

Market Oracle FREE Newsletter

The MRI 3D Report

Google and General Electric Technical Analysis

Companies / Company Chart Analysis Jan 07, 2015 - 11:50 AM GMT

By: Austin_Galt

Companies

Google
Google Inc (GOOG) is a global technology company listed on the NASDAQ with a market capitalisation of around $350billion. Price last traded at $501.96. To learn more about the company, please visit its website at www.google.com

Let’s examine the technicals of the company using the monthly, weekly and daily charts.


GOOG MONTHLY CHART



This chart shows the move into the February 2014 top was of a parabolic nature which is common behaviour found leading into highs.

It looks as if an ABC correction has just played out which would imply a move to new highs. But rules are made for breaking and it is possible that any move higher truncates failing to make new highs.

The Bollinger Bands show price moving away from the upper band before finding temporary support at the middle band. Price eventually made up its mind that it wanted to go lower and is now at the lower band.

Price looks to be a critical juncture. Does price continue on downwards clinging to the lower band or does it reverse back up? I favour the latter. Whatever decision price makes, it is now time to make it!

The Parabolic Stop and Reverse (PSAR) indicator has a bearish bias with the dots above price. These dots are currently at $595. Taking out those dots now would likely mean new rally highs are in store. I have my doubts about that happening. I’d like to see how price behaves if and when it trades back up to test the dots on the upside.

The lower indicators, being the Relative Strength Indicator (RSI), Stochastic and Moving Average Convergence Divergence (MACD), are all trending down and looking bearish. New lows are being made in these indicators as price also makes new lows. This is bearish. However, it is worth keeping in mind the possibility that price makes new highs that are accompanied by bearish divergences in these indicators.

GOOG WEEKLY CHART

The previous swing low was the October 2013 low and until that level is taken out then bias has to be given to a continuation of the uptrend.

The recent low was accompanied by bullish divergences in the RSI and Stochastic indicator. That is encouraging for the bulls although it doesn’t rule out a further low. I doubt that though. Why?

The PSAR indicator is now showing a bullish bias after price busted the dots to the upside last week. As often happens, price then goes back down to test the support. Price has done just that here and as long as the dots on the downside are not taken out then the bulls will keep on rocking. The dots currently stand at $491.29.

Also, the Bollinger Bands show the recent low spiked below the lower band before rallying up to the middle band. This middle band has provided resistance and price has come back down to the lower band. Will this lower band provide support once again? I think so.

I have added Fibonacci retracement levels of the move up from October 2013 low to February 2014 top. The recent low tickled the underside of the 61.8% level and that may signal the end of this current move down.

So while there appears some short term upside in store, the longer term picture does not look so rosy. We’ll know soon enough whether or not Google has had its last giggle.

Disclosure – I have no financial interest in GOOG.

General Electric

General Electric Company (GE) is a diversified technology and financial services company and is listed on the New York Stock Exchange (NYSE) with a market capitalisation of around $250billion. Price last traded at $24.07. To learn more about the company, please visit its website at www.ge.com

Let’s take a top down approach to the analysis starting with the yearly chart.

GE YEARLY CHART



Price hit a high of $60.50 in 2000 and has been clobbered ever since. The price action since that high looks corrective in nature compared to the move into the all time high. It looks like an ABC corrective pattern is now complete. It is possible a further wave D and E are playing out but I doubt that scenario. Why?

I have added Fibonacci retracement levels of the move up from the 1980 low to all time high. We can see price dipped below the 88.6% level which was an extremely deep correction. There really isn’t much more downside to be had unless the company goes belly up!

Also, I have added the Parabolic Stop and Reverse (PSAR) indicator which shows price busting the dots on the upside back in 2013. So the dots on the downside now act as support. These dots currently stand at $7.36. Breaking below there would most likely signify new lows are in store. I doubt it.

The Relative Strength Indicator (RSI) has rallied up from its lows but has failed to make a new swing high. Nothing to get excited about here yet.

I have added a 14 period moving average denoted by the purple line. Price seems to be finding some resistance around this average which is trending down so nothing to get too excited about here either. While price is currently below the purple line, I favour price doing some more work around this average which implies a move higher in price from current levels. The moving average currently sits at $26.26.

GE MONTHLY CHART



The Andrew’s Pitchfork shows a recent bearish development with price breaking below the lower channel which had provided support for the uptrend since October 2011. A common occurrence after this happens is price rallies in an attempt to get back into the lower channel however the efforts are normally in vain.

Now it is quite possible that price hits new rally highs in its failed attempt to get back into the pitchfork formation. The current rally high is $28.09 set in December 2013 and price trading back up to the lower pitchfork trend line would see price around the $29 to $30 mark. That is also right around the 50% Fibonacci retracement level as seen in the yearly analysis.

I have added Fibonacci retracement levels of the move down from the 2007 high to 2009 low. The rally high pulled up just short of the 61.8% level which stands at $28.24. Now the 61.8% level is one of the most popular levels and I have noticed price often trades marginally past this level in an attempt to fake out the traders that monitor these levels. I suspect that is what will happen here with price making a new rally high just above the 61.8% level. And the 50% level looks to be providing support currently and can be the springboard for price to get back up to the 61.8% level.

The PSAR indicator is showing a bearish bias but this may just be part of the toing and froing of price as it consolidates.

The Momentum indicator shows the rally up from the 2009 low has been losing steam. A move up to new rally highs now would likely see this indicator move back up to the downtrend line I have drawn. I’d venture if and when that happens the rally will have run its course.

The RSI is looking quite weak and I’d like to see price rally to new highs while this indicator only makes a lower high implying a bearish divergence. Let’s see.

GE WEEKLY CHART

The move down from the January 2014 looks like an ABC corrective move that has already finished. It is possible that this pattern may finish with a wave E low while as long as the previous swing low at $22.92, denoted by the horizontal line, is not breached then the uptrend remains intact.

I have added Fibonacci retracement levels of the move up from the wave C low to recent high. This shows the recent move down has breached the 88.6% level before rallying back above the level. That could well be it.

The PSAR indicator is evidence of the corrective nature of trading with price busting the dots all over the place. This is also testament to the fact that this indicator is more effective in a trending market.

The Bollinger Bands is further evidence of the consolidation taking place with price bouncing up and down between the upper and lower bands. Price is now back down at the lower band. It looks like decision time for price. Will it bounce back up or will the downtrend accelerate as it clings to the lower band? I favour the former.

The RSI and Stochastic indicator are showing a recent pattern of higher highs and higher lows which would provide some comfort to the bulls. Perhaps the next leg up in these indicators will commence shortly.

GE DAILY CHART

I have drawn a horizontal line denoting a previous swing high. We can see price busted above this level to put in a higher high. This move up left a gap which can be seen in the green highlighted circle and sure enough price came back down to fill in this gap.

As long as price now stays above the October 2014 low, we will have a higher low in place.

The Bollinger Bands show price trading well outside the lower band on this current low. This is a common occurrence at lows so perhaps we now have one in place.

The RSI is back in deeply oversold territory while the MACD indicator has a bearish bias but the averages have diverged quite a lot. Either there is some regression to the mean in the form of a rally now or things get ugly quickly. 

Summing up, the short term outlook remains positive while there appear to be some big storm clouds gathering over the medium term.

Disclosure – I have no financial interest in GE.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

My website is www.thevoodooanalyst.com 


© 2014 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife